Next-Generation Manufacturing: Executive Overview

NEXT-GENERATION MANUFACTURING PROJECT
Next-Generation Manufacturing
A Framework for Action
Executive Overview
January 1997
Copyright 1997 Agility Forum, Leaders for Manufacturing, and Technologies Enabling Agile Manufacturing All rights reserved. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval systems, without permission in writing from the publisher.
FOREWORD The Next-Generation Manufacturing Project was initiated in 1995 to develop a framework for action that U.S. manufacturers, individually and collectively, can use as a guide to chart a course for success in an increasingly complex and competitive global business environment. Individuals from more than 100 companies, industry associations, government agencies, and academic institutions have worked together to develop a broadly accepted framework for next-generation manufacturing enterprises. They identified key competitive drivers of the next-generation environment; defined attributes and imperatives required to respond to these drivers; and developed recommendations for actions that industry, government, and academia can take to help American manufacturers thrive in the intensely competitive and dynamic global markets of the 21st Century. This document is part of the NGM Project Report, which summarizes the research, findings, and recommendations developed by the NGM Project Team. The full report comprises the following volumes: Executive Overview, which presents a management overview of the project results Volume I, Summary Report, which presents the project teams findings and recommendations Volume II, Imperatives for Next-Generation Manufacturing, which presents individual papers on the 10 NGM Imperatives, as follows: Workforce Flexibility Knowledge Supply Chains Rapid Product/Process Realization Innovation Management Change Management Next-Generation Manufacturing Processes & Equipment Pervasive Modeling & Simulation Adaptive, Responsive Information Systems Extended Enterprise Collaboration Enterprise Integration. Volume III, Digest of U.S. Industry Roadmaps, which abstracts strategic plans and roadmaps developed by industry and government over the past 5 years Volume IV, Views of the Future, which samples current thinking about the 21st Century competitive environment and the evolution of the manufacturing industry. For a full copy of the report or more information about NGM, please contact: NGM Project Office 125 Goodman Drive Bethlehem, PA 18015-3715 Telephone: 610-758-5510 Fax: 610-694-0542 E-mail: info@agilityforum.org http://www.agilityforum.org
In addition to the many contributions of U.S. industry, industry associations, and academic institutions, this publication is supported by the National Science Foundation under Cooperative Agreement No. DMI-9696175. Any opinions, findings, or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation, Department of Defense, Department of Energy, Department of Commerce, or other sponsoring organizations.
Printed in the United States of America
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CONTENTS NGM: Charting a Course for the Future of U.S. Manufacturing ................................................................... 1 The NGM Approach: A Broad Foundation ................................................................................................... 1 Drivers: Understanding the New Competitive Environment .......................................................................... 2 NGM Attributes: A Vision for the Next Generation ...................................................................................... 3 Dilemmas: The Challenge of Managing Change ............................................................................................ 3 Imperatives: Creating the Culture, Business Processes, and Technologies for the Next Generation ................. 4 New Insights for Manufacturing .................................................................................................................... 5 Action Plans: The Journey to the Next Generation ........................................................................................ 6 Path Forward: The Next Steps ........................................................................................................................ 8
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NGM
Charting a Course for the Future of U.S. Manufacturing
Tomorrows winners will have very different characteristics than todays winners. Lester C. Thurow, The Future of Capitalism
nprecedented, interrelated changes in the global business environment are creating entirely new success factors for industrial competition. How do U.S. companies respond to the new challenges of global competitiveness? How do they resolve the dilemmas inherent in the new competitive environment? How do manufacturers respond in this era of rapid and profound change? What actions can help companies adapt their enterprises to meet the challenges of the next generation? The NGM Project provides a framework for developing those answers. NGM is an industry-led effort, made possible with support of the U.S. Department of Energy, Department of Defense, National Institute of Standards and Technology, and the National Science Foundation, and building on other national manufacturing initiatives, to: Develop a broadly accepted model of future manufacturing enterprises Recommend actions that manufacturers, working individually and in partnership with government, industry, and the academic community, can use to attain world-class status. This report is for those who are looking for the most significant new trends. Even though the U.S. is on a competitive upswing, organizations with early insight on how markets and industry are moving will realize a significant competitive advantage. NGM, through its structured framework, provides a methodology for developing that insight. The framework developed here provides a benchmark for companies and institutions to use in strategic planning processes for their own enterprises. It is important to understand that the work in this report represents a forward-looking snapshot in time, and will need to be continually tested and updated to ensure it remains aligned with evolving trends. The NGM Project provides a structure for that process. The NGM framework uses a hierarchical format that first identifies the Global Drivers of the new marketplace. From these derives a set of Attributes that next-generation companies and enterprises must possess. A series of Barriers and attendant Dilemmas are then identified that must be overcome to achieve the NGM Attributes. Key enablers to overcome these barriers are then defined as Imperatives. From the Imperatives arise the specific Action Recommendations that can be acted upon to move toward the Next Generation.
Global Drivers
NGM Enterprise Attributes
Dilemmas (Barriers to Attributes)
NGM Imperatives Action Plan Recommendations
NGM provides a sound framework for assessing the business environment and developing strategic responses for nextgeneration success.
The NGM Approach: A Broad Foundation

The NGM Project was designed to develop a broad foundation of input to synthesize a vision of the future manufacturing environment and define appropriate responses for the nations collective manufacturing constituency. To this end, the work included: Seeking the perspectives of more than 50 manufacturing executives from large and small companies, and forming an Executive Advisory Group to guide and advise the project team (see Appendix 1 of Volume I, Summary Report).
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As knowledge becomes the primary asset of the company of the future, it will bring about a major change in the economy as we know it. National Center for Manufacturing Sciences, NCMS Collaborative Manufacturing Agenda
Forming six industry-based Thrust Area Teams to perform research and provide perspectives across the nations manufacturing base. Reviewing more than 150 manufacturing-related strategic plans and roadmap documents developed by industry and government over the past 5 years. In-depth review of books and other literature dealing with trends and predictions for the future competitive environment. A fan-out of this and other NGM documents to an audience of hundreds of industrial, government, and academic reviewers. The efforts of more than 500 people from more than 100 companies, 15 participating consortia, and universities who have served as content experts, reviewers, and advisors to the project. Project coordination for NGM was provided by a team of three organizations: the Agility Forum; the Leaders for Manufacturing (LFM) program of the Massachusetts Institute of Technology; and the Technologies Enabling Manufacturing (TEAM) program. Funding for the project is from the National Science Foundation, U.S. Department of Energy, Department of Defense, and National Institute of Standards and Technology. A number of national industry organizations played significant roles by providing personnel to support the research effort or by serving on the NGM Steering Committee, which provided guidance and direction to the project team: National Association of Manufacturers National Center for Advanced Technologies National Center for Manufacturing Sciences National Coalition for Advanced Manufacturing Society of Manufacturing Engineers Consortium for Advanced Manufacturing International Coalition for Intelligent Manufacturing Systems Electronic Industries Association Modernization Forum American Production and Inventory Control Society.
Drivers: Understanding the New Competitive Environment

The NGM Drivers are the forces that shape the future competitive environment and exist irrespective of the actions of any one individual, company, or nation. These key drivers of the 21st Century are: Ubiquitous availability and distribution of information Accelerating pace of change in technology Rapidly expanding technology access Globalization of markets and business competition Global wage and job skills shifts Environmental responsibility and resource limitations Increasing customer expectations.
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NGM Attributes: A Vision for the Next Generation

Response to the NGM drivers dictates that successful Next-Generation Manufacturers possess an integrated set of attributes: Customer Responsiveness The NGM Company will work with customers, and in anticipation of customers, to supply integrated products and services that fit evolving life-cycle requirements of function, cost, and timeliness. Physical Plant and Equipment Responsiveness The NGM Company will employ an ever-growing knowledge base of manufacturing science to implement reconfigurable, scaleable, cost-effective manufacturing processes, equipment, and plants that adapt rapidly to specific production needs. Human Resource Responsiveness The entire workforce of the NGM Company will comprise highly capable and motivated knowledge workers who can work in a flexible work environment, with substantial independent decision-making. Global Market Responsiveness The NGM Company will develop its manufacturing strategy to anticipate and respond to a continuously changing global market, with operations and infrastructure tailored to local requirements. Teaming as a Core Competency The NGM Company will team within and outside the company to acquire and focus needed knowledge and capabilities to develop, deliver, and support its products and services. Responsive Practices and Cultures The NGM Company will continuously evolve core competencies, organizational structure, culture, and business practices, enabling it to anticipate and respond rapidly to changing customer demands.
Dilemmas: The Challenge of Managing Change

In attempting to pursue evolutionary paths to achieving NGM attributes, leaders of todays forward-looking industries have recognized that many desired characteristics of the evolving business environment are in apparent conflict. These paradoxes present dilemmas that leaders in industry, government, and the academic community must join forces to resolve. Some of these dilemmas are how to: Have employee security without lifetime employment Simultaneously satisfy all stakeholder needs Practice collaborative knowledge sharing within knowledge-based competition Control core competencies without owning them Manage assets, when the most valuable asset is knowledge Keep domestic jobs while developing global markets Reward learning in a reward-for-doing environment
Maintain national economic and military security with R&D increasingly being done globally Deal with transnational corporations. Competitive advantage lies in the successful resolution of these dilemmas and will require the same kind of innovative thinking that solved similar challenges in the past. For example, the transition from mass production to lean production can be attributed in large part to breaking the dilemma of low cost and high quality. An understanding of quality and just-in-time material management broke the dilemma of how to have low inventory and rapid response.
Imperatives: Creating the Culture, Business Processes, and Technologies for the Next Generation
It is becoming difficult to distinguish products based on technology alone, and customers expect more value at a lower price. Michael S. Dell, Chairman & CEO, Dell Computer
The NGM Project has identified a set of generic enabling practices and technologies that are critical for achieving the NGM Attributes and resolving the NGM dilemmas. We have clustered these enablers into 10 high-leverage Imperatives, as follows, grouped within the four elements of the NGM model: People-Related Imperatives Workforce Flexibility Knowledge Supply Chains Business Process-Related Imperatives Rapid Product/Process Realization Innovation Management Change Management Technology-Related Imperatives Next-Generation Manufacturing Processes and Equipment Pervasive Modeling and Simulation Adaptive, Responsive Information Systems Integration-Related Imperatives Extended Enterprise Collaboration Enterprise Integration. These 10 are likely high on any companys own list of business imperatives. They are strongly interdependent and must be addressed simultaneously to realize maximum benefit. An abstract of each of the Imperatives is provided in Section 6 of Volume I, Summary Report, and each is discussed in detail in separate Imperative papers in Volume II, Imperatives for Next-Generation Manufacturing.
Strategy Direction & Alignment
People
Integration Framework Business Processes Technology
The NGM Company

Customer Responsiveness Physical Plant & Equipment Responsiveness Human Resources Responsiveness Global Market Responsiveness Teaming as a Core Competency Responsive Practices & Culture
The NGM Company model is an integrated entity of people, business processes, and technologies.
New Insights for Manufacturing

Working together on the NGM Project, the participating individuals and organizations interacted to develop a deeper understanding of their common challenges. Each company is indeed different, but the major issues facing all are the same and thus are best addressed in a coordinated fashion. The NGM Project provides a structured framework that companies can use to understand and master the complexity inherent in the nextgeneration competitive environment. It also allows companies to continually assess emerging trends and adjust their strategies accordingly. The principal discriminators of the NGM Project include the depth, breadth, and strength of the foundation i.e., the input of the Executive Advisory Board and other industry executives, the analysis of U.S. industry roadmaps abstracted in Volume III, the futurist views abstracted in Volume IV, and the involvement of dozens of organizations and hundreds of manufacturing and business experts in developing a broadly accepted strategy for the future. This intense process highlighted and deepened a collective understanding of increasingly critical issues, including: The global drivers of the business environment are strongly interdependent, as are the attributes and imperatives required to respond to those drivers. The NGM dilemmas are recognized by all companies, and resolution of these is mandatory to compete in the next generation. The requirements of the Extended Enterprise will govern the actions of an individual company more than ever before. Innovation in all a company does is central to its competitive capability.
Only by identifying and applying innovation to the critical path of our own development can we win. William L. Duncan, Manufacturing 2000
Increasing requirements for workforce flexibility have profound social as well as business implications. Teaming in trust-based rather than confrontational relationships is essential to quickly solving complex problems. Manufacturing must be addressed as a total, dynamic system that tightly integrates people, processes, and technology. Solutions to problems and significant new competitive factors often emerge from outside the specific manufacturing sector most strongly influenced. The increasingly important need to satisfy the desires of all stakeholders impacts every aspect of enterprise strategy and operations.
Action Plans: The Journey to the Next Generation

Implementing NGM practices, business processes, and technologies will require the combined, collaborative efforts of companies, the community, (federal, state, and local government, associations, consortia, academia, etc.) and individuals. No single entity can bring about the required changes. The actions summarized below are high-leverage musts consolidated from the actions defined in the 10 NGM Imperative papers, and reflect the recognition of cross-cutting steps that must be taken to provide a foundation for widespread implementation: 1. Establish an NGM Extended Enterprise Demonstration Site to develop and pilot collaborative business and legal processes, and serve as a national clearinghouse for company capabilities. 2. Develop NGM models and assessment capability to assist companies in planning their evolution to the next generation. 3. Develop and deploy a seamless, integrated, interoperable manufacturing environment using 100% commercial solutions, providing a common foundation for NGM factories. 4. Develop NGM technology roadmaps and apply those roadmaps to guide development of NGM solutions. 5. Develop systematic processes for knowledge capture and knowledge-based manufacturing, enabling true enterprise integration and rapid product/process realization. 6. Establish and implement methodologies to infuse NGM concepts through all levels of corporations and enterprises. 7. Advance the understanding of innovation and change management to provide a basis for competitive advantage through step function improvements of productivity and responsiveness. 8. Establish a government partnership with industry and academia for a supportive manufacturing infrastructure. 9. Enable and promote pervasive use of modeling and simulation. 10. Develop intelligent processes and flexible manufacturing systems.
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The Projects Summary Report and Imperative papers expand on these recommendations in detail, and offer suggested courses of action for implementation by the nations manufacturing stakeholders. Individual companies will need to determine those actions that make sense for their own market positions and strategic plans. Depending on companies specific operations and strategic goals, they can identify which best practices and actions recommendations they can implement immediately. Many of the cited technologies and practices represent key capabilities desired by a broad cross-section of the nations manufacturing community, and so significant opportunity exists for technology providers and other infrastructure businesses to develop and market next-generation products and services. Companies must drive the process of developing the new practices. Some can be implemented by companies alone. Others can be started by contacting the organizations involved in the NGM Project, and by becoming engaged in ongoing development projects. Small and medium-sized companies can likewise apply the NGM framework to enhance their own strategic planning and R&D efforts, and should also participate in the development projects. Industry associations, consortia, and national laboratories and facilities can take the lead to establish collaborative efforts to develop, pilot, and validate key cross-cutting new practices and technologies; act as neutral brokers for development of standards and validation of manufacturing practices; and provide facilities and leadership for NGM technology pilots to address large, complex technological issues (grand challenges) requiring integration of multiple disciplines and organizations. Academia can use the NGM attributes and imperatives to define a more rational set of research directions than presently exists. Topics in technology, human resources, and business processes can all be derived from these imperatives, and can lead to an integrated Knowledge Supply Chain as suggested in one imperative. Universities can also serve as a neutral ground for sharing ideas and research among companies, associations, and government agencies. Government agencies can align their R&D strategies to support the efforts of industry and academia to translate the concepts of NGM to reality. They can also examine the legal and regulatory barriers to the next-generation Enterprise vision. State and local governments are vital to working with industry to foster the changes needed in education to facilitate an employable, capable workforce.
Path Forward: The Next Steps

The NGM report is applicable to the wide spectrum of U.S. industry. Companies, individuals, and community institutions should use it to stimulate thinking in a structured framework, identify their own drivers, attributes, and imperatives, and implement their imperatives through specific action plans. The effort of the NGM Project does not end with delivery of this report; rather, it launches the process of dialogue and activity that must occur to realize the NGM vision. Companies large and small, industry associations, national laboratories and facilities, and government agencies, are invited to come together to develop and implement the concepts, practices, processes, and technologies of next-generation manufacturing.
This report is not for managers we have enough of them. This report is for leaders, who have the vision and ability to transform its recommendations into actions that will move American manufacturing into the next century. Dwight Carlson, CEO, Perceptron, Inc.
The Agility Forum, the Leaders for Manufacturing Program at MIT, and the TEAM program are committed to continuing the work started in this project. If you would like to provide input, seek further information, or participate in development and implementation efforts, please contact the NGM Project Office at the address shown in the front of this report. The organizations that have participated in the NGM Project over the past year-and-a-half will make presentations at conferences and workshops over the coming months to communicate the NGM visions, discuss the actions recommended to support implementation, and promote the alignment of goals, plans, and objectives essential to focusing the resources of the nation on the path to success. A schedule of these presentations is available at the Agility Forums web site, http:// www.agilityforum.org/
Volume I Summary Report

January 1997
In addition to the many contributions of U.S. industry, industry associations, and academic institutions, this publication is supported by the National Science Foundation under Cooperative Agreement No. DMI-9696175. Any opinions, findings, or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation, Department of Defense, Department of Energy, Department of Commerce, or other sponsoring organizations. Printed in the United States of America
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NE XT - GE N E RA T I ON M A N U F A C T U RI N G P ROJ E C T
125 G O O D MA N D R I V E B E TH L E H E M, PA 18015- 3715 PH O N E 1- 610- 758- 5510 F A X 610- 694- 0542
January 1997
Over the last 15 months, a dedicated team of individuals has worked to make the NGM Project a success. NGM is unique a true partnership of industry, government, academia, associations, and consortia, each contributing to all aspects of the program. NGM was partially funded by the National Science Foundation, the National Institute of Standards and Technology, the Department of Defense, and the Department of Energy, but this represented only about a third of the money spent on the project. There were three principal investigator organizations: the Agility Forum, Leaders for Manufacturing (LFM), and Technologies Enabling Agile Manufacturing (TEAM), providing a crosscut of perspectives to ensure a balanced and industryresponsive result. In addition, 10 other associations supported and contributed to the project by providing industry leaders for the Executive Advisory Group (EAG) and participants for the NGM Thrust Area Teams, by which most of the work was done. There were over 50 EAG members and nearly 500 contributors to the overall work. Hence, NGM is a prototype for next-generation partnering from funding support and management processes to data gathering, analysis, and dissemination of results. NGM was built on a broad foundation of excellent work done by the nations manufacturing community over the last 5 years. It is a conscious, meticulous effort to learn from all available resources, and to extend that knowledge and insight. As an example, the project team integrated and synthesized more than 150 current industry and government roadmap documents to provide a baseline of national goals, objectives, and issues relative to manufacturing. This is the first effort of its kind and is included in the NGM report (see Volume III) as a useful reference. NGM followed a disciplined strategic methodology to determine: The global business Drivers forcing companies to change in the future The Attributes of successful competitors in the new environment The Enablers required for companies to overcome barriers and migrate toward the attributes. Select sets of highly leveraged enablers, or Imperatives, drove the creation of frameworks for action that companies can use to begin the journey toward a Next-Generation Manufacturing Enterprise. Not surprisingly, we found that on this level, the actions could not be prescriptive. Companies are evolving by necessity into globally extended enterprises in collaboration with their suppliers, customers, and even their competitors. Therefore, each company should use the framework for action as a guide, and leaders should make decisions as to what paths their respective organizations should take depending on the solutions required by their own environment. The maximum value of the NGM report will be realized as organizations apply the NGM framework as a strategic planning tool and develop their own roadmaps to the next generation. We encourage the nations manufacturing leadership to take advantage of this report and turn it to their competitive advantage.
Rusty Patterson CEO, Agility Forum
David Hardt Co-Director, Leaders for Manufacturing (LFM)
Richard Neal Program Manager, Technologies Enabling Agile Manufacturing (TEAM)
FOREWORD
The Next-Generation Manufacturing Project was initiated in 1995 to develop a framework for action that U.S. manufacturers, individually and collectively, can use as a guide to chart a course for success in an increasingly complex and competitive global business environment. Individuals from more than 100 companies, industry associations, government agencies, and academic institutions have worked together to develop a broadly accepted framework for next-generation manufacturing enterprises. They identified key competitive drivers of the next-generation environment; defined attributes and imperatives required to respond to these drivers; and developed recommendations for actions that industry, government, and academia can take to help American manufacturers thrive in the intensely competitive and dynamic global markets of the 21st Century. This document is part of the NGM Project Report, which summarizes the research, findings, and recommendations developed by the NGM Project Team. The full report comprises the following volumes: Executive Overview, which presents a management overview of the project results Volume I, Summary Report, which presents the project teams findings and recommendations Volume II, Imperatives for Next-Generation Manufacturing, which presents individual papers on the 10 NGM Imperatives, as follows: Workforce Flexibility Knowledge Supply Chains Rapid Product/Process Realization Innovation Management Change Management Next-Generation Manufacturing Processes & Equipment Pervasive Modeling & Simulation Adaptive, Responsive Information Systems Extended Enterprise Collaboration Enterprise Integration. Volume III, Digest of U.S. Industry Roadmaps, which abstracts strategic plans and roadmaps developed by industry and government over the past 5 years Volume IV, Views of the Future, which samples current thinking about the 21st Century competitive environment and the evolution of the manufacturing industry. For a full copy of the report or more information about NGM, please contact: NGM Project Office 125 Goodman Drive Bethlehem, PA 18015-3715 Telephone: 610-758-5510 Fax: 610-694-0542 E-mail: info@agilityforum.org http://www.agilityforum.org
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CONTENTS Preface The NGM Approach: A Broad Foundation ..................................................................................... 1 1.0 Executive Summary: Charting a Course for the Future of U.S. Manufacturing ...................................... 2 2.0 The NGM Enterprise: A Vision of the Future ......................................................................................... 7 3.0 Global Drivers: The Forces of Change for U.S. Industry ....................................................................... 11 4.0 NGM Attributes: A Vision for the Next Generation ............................................................................. 14 5.0 Dilemmas: The Challenge of Managing Continuous Change................................................................ 23 6.0 NGM Imperatives: Creating the New Practices, Processes, and Technologies ........................................ 26 7.0 NGM Action Plans: Starting the Journey to the Next Generation ......................................................... 45 8.0 Next Steps: A Call to Action ................................................................................................................. 54 Appendices Appendix 1 Summary of Executive Advisory Group Findings and Executive Interviews ........................ A-2 Appendix 2 Digest of U.S. Industry Roadmaps ................................................................................... A-12 Appendix 3 Acknowledgements .......................................................................................................... A-15
Preface
THE NGM APPROACH:
A Broad Foundation
he Next-Generation Manufacturing (NGM) Project was designed to develop a broad foundation of input to synthesize a vision of the future manufacturing environment and define appropriate responses for the nations collective manufacturing constituency. To this end, the work included: Seeking the perspectives of more than 50 manufacturing executives from large and small companies, and forming an Executive Advisory Group to guide and advise the project team (see Appendix 1). Forming six industry-based Thrust Area Teams to perform research and provide perspectives from across the nations manufacturing base. Reviewing more than 150 manufacturing-related strategic plans and roadmap documents developed by government and industry over the past 5 years (see Appendix 2 and Volume III, Digest of U.S. Industry Roadmaps).
As knowledge becomes the primary asset of the company of the future, it will bring about a major change in the economy as we know it. National Center for Manufacturing Sciences, NCMS Collaborative Manufacturing Agenda
In-depth review of books and other literature dealing with trends and predictions for the future competitive environment (see Volume IV, Views of the Future). A fan-out of this and other NGM documents to an audience of hundreds of industrial, government, and academic reviewers. The efforts of more than 500 people from more than 100 companies, 15 participating consortia, and universities who have served as content experts, reviewers, and advisors to the project (see Appendix 3). Project coordination for NGM was provided by a team of three organizations: the Agility Forum; the Leaders for Manufacturing (LFM) program of the Massachusetts Institute of Technology; and the Technologies Enabling Manufacturing (TEAM) program. Funding for the project is from the National Science Foundation, U.S. Department of Energy, Department of Defense, and National Institute of Standards and Technology. A number of national industry organizations played significant roles by providing personnel to support the research effort or by serving on the NGM Steering Committee, which provided guidance and direction to the project team: National Association of Manufacturers National Center for Advanced Technologies National Center for Manufacturing Sciences National Coalition for Advanced Manufacturing Society of Manufacturing Engineers Consortium for Advanced Manufacturing International Coalition for Intelligent Manufacturing Systems Electronic Industries Association Modernization Forum American Production and Inventory Control Society.
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EXECUTIVE SUMMARY
Charting a Course for the Future of U.S. Manufacturing
nprecedented, interrelated changes in the global business environment are creating entirely new success factors for industrial competition.
How do U.S. companies respond to the new challenges of global competitiveness? How do they resolve the dilemmas inherent in the new competitive environment? How do manufacturers respond in this era of rapid and profound, change? What actions can help companies adapt their enterprises to meet the challenges of the next generation? This document, the summary report of the NGM Project, provides a framework for developing those answers. NGM is an industry-led effort, made possible with support of the U.S. Department of Energy, Department of Defense, National Institute of Standards and Technology, and the National Science Foundation, and building on other national manufacturing initiatives, to: Develop a broadly accepted model of future manufacturing enterprises Recommend actions that manufacturers, working individually and in partnership with government, industry, and the academic community, can use to attain world-class status. This report is for those who are looking for the most significant new trends. Even though the U.S. is on a competitive upswing, organizations with early insight on how markets and industry are moving will realize a significant competitive advantage. NGM, through its structured framework, provides a methodology for developing that insight. The framework developed here provides a benchmark for companies and institutions to use in strategic planning processes for their own enterprises. It is important to understand that the work in this report represents a forward-looking snapshot in time, and will need to be continually tested and updated to ensure it remains aligned with evolving trends. The NGM Project provides a structure for that process. Throughout this project, the concept of the Extended Enterprise has gained increasing importance; it is thus important to clarify the distinction between a Company and an Extended Enterprise: A Company is a conventionally defined profit-making entity with management sovereignty and well-established bounds of ownership and liability. It is charged with responsibility and control over its own actions. An Extended Enterprise is a group of institutions that develop linkages, share knowledge and resources, and collaborate to create a product and/or service. This collaboration maximizes combined capabilities and allows each institution to realize its strategic goals by providing integrated solutions to customers needs. The NGM framework uses a hierarchical format that first identifies the Global Drivers of the new marketplace. From these derives a set of Attributes that next-generation companies and enterprises must possess. A series of Barriers and attendant Dilemmas are then identi-
Tomorrows winners will have very different characteristics than todays winners. Lester C. Thurow, The Future of Capitalism
Global Drivers
fied that must be overcome to achieve the NGM Attributes. Key enablers to overcome these barriers are then defined as Imperatives. From the Imperatives arise the specific Action Recommendations that can be acted upon to move toward the Next Generation. Drivers: Understanding the New Competitive Environment The NGM Drivers are the forces that shape the future competitive environment and exist irrespective of the actions of any one individual, company, or nation. These key drivers of the 21st Century are: Ubiquitous availability and distribution of information Accelerating pace of change in technology Rapidly expanding technology access Globalization of markets and business competition Global wage and job skills shifts Environmental responsibility and resource limitations Increasing customer expectations. NGM Attributes: A Vision for the Next Generation Response to the NGM drivers dictates that successful Next-Generation Manufacturers possess an integrated set of attributes: Customer Responsiveness The NGM Company will work with customers, and in anticipation of customers, to supply integrated products and services that fit evolving life-cycle requirements of function, cost, and timeliness. Physical Plant and Equipment Responsiveness The NGM Company will employ an ever-growing knowledge base of manufacturing science to implement reconfigurable, scaleable, cost-effective manufacturing processes, equipment, and plants that adapt rapidly to specific production needs. Human Resource Responsiveness The entire workforce of the NGM Company will comprise highly capable and motivated knowledge workers who can work in a flexible work environment, with substantial independent decision-making. Global Market Responsiveness The NGM Company will develop its manufacturing strategy to anticipate and respond to a continuously changing global market, with operations and infrastructure tailored to local requirements. Teaming as a Core Competency The NGM Company will team within and outside the company to acquire and focus needed knowledge and capabilities to develop, deliver, and support their products and services. Responsive Practices and Cultures The NGM Company will continuously evolve core competencies, organizational structure, culture, and business practices, enabling it to anticipate and respond rapidly to changing customer demands.
NGM provides a sound framework for assessing the business environment and developing strategic responses for nextgeneration success.
Dilemmas: The Challenge of Managing Change In attempting to pursue evolutionary paths to achieving NGM attributes, leaders of todays forward-looking industries have recognized that many desired characteristics of the evolving business environment are in apparent conflict. These paradoxes present dilemmas that leaders in industry, government, and the academic community must join forces to resolve. Some of these dilemmas are how to: Have employee security without lifetime employment Simultaneously satisfy all stakeholder needs Practice collaborative knowledge sharing within knowledge-based competition Control core competencies without owning them Recover rising plant and equipment costs with shorter product and process lifetimes Manage company assets, when the most valuable asset is knowledge Keep domestic jobs while developing global markets Reward learning in a reward-for-doing environment Maintain national economic and military security with R&D increasingly being done globally. Competitive advantage lies in the successful resolution of these dilemmas and will require the same kind of innovative thinking that solved similar challenges in the past. For example, the transition from mass production to lean production can be attributed in large part to breaking the dilemma of low cost and high quality. An understanding of quality and just-in-time material management broke the dilemma of how to have low inventory and rapid response. Imperatives: Creating the People, Business Processes, and Technology Solutions for the Next Generation The NGM Project has identified a set of generic enabling practices and technologies that are critical for achieving the NGM Attributes and resolving the NGM dilemmas. We have clustered these enablers into 10 high-leverage Imperatives, as follows, grouped within the four elements of the NGM model: People-Related Imperatives Workforce Flexibility Knowledge Supply Chains Business Process-Related Imperatives Rapid Product/Process Realization Innovation Management Change Management Technology-Related Imperatives Next-Generation Manufacturing Processes and Equipment Pervasive Modeling and Simulation Adaptive, Responsive Information Systems
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Integration-Related Imperatives Extended Enterprise Collaboration Enterprise Integration. These 10 are likely high on any companys own list of business imperatives. They are strongly interdependent and must be addressed simultaneously to realize maximum benefit. Each of the Imperatives is discussed in detail in separate Imperative papers in Volume II, and each is abstracted in Section 6 of this volume. New Insights for Manufacturing Working together on the NGM Project, the participating individuals and organizations interacted to develop a deeper understanding of their common challenges. Each company is indeed different, but the major issues facing all are the same and thus are best addressed in a coordinated fashion.
It is becoming difficult to distinguish products based on technology alone, and customers expect more value at a lower price. Michael S. Dell, Chairman & CEO, Dell Computer
The NGM Project provides a structured framework that companies can use to understand and master the complexity inherent in the nextgeneration competitive environment. It also allows companies to continually assess emerging trends and adjust their strategies accordingly. The principal discriminators of the NGM Project include the depth, breadth, and strength of the foundation i.e., the input of the Executive Advisory Board and other industry executives, the analysis of U.S. industry roadmaps abstracted in Volume III, the futurist views abstracted in Volume IV, and the involvement of dozens of organizations and hundreds of manufacturing and business experts in developing a broadly accepted strategy for the future. This intense process highlighted and deepened a collective understanding of increasingly critical issues, including: The strong interdependence of the global drivers of the business environment, and the attributes and imperatives required to respond to those drivers. The NGM dilemmas are recognized by all companies, and resolution of these is mandatory to compete in the next generation. The requirements of the Extended Enterprise will govern the actions of an individual company more than ever before. Innovation in all a company does is central to its competitive capability. Increasing requirements for workforce flexibility have profound social as well as business implications. Teaming in trust-based rather than confrontational relationships is essential to achieving the speed required to solve complex problems. Manufacturing must be addressed as a total, dynamic system that tightly integrates people, processes, and technology. Solutions to problems and significant new competitive factors often emerge from outside the specific manufacturing sector most strongly influenced.
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The increasingly important need to satisfy the desires of all stakeholders impacts every aspect of enterprise strategy and operations. Path Forward: The Next Steps The NGM report is applicable to the wide spectrum of U.S. industry. Companies, individuals, and community institutions should use it to stimulate thinking in a structured framework, identify their own drivers, attributes, and imperatives, and implement their imperatives through specific action plans. The effort of the NGM Project does not end with the delivery of this report; rather, it launches the process of dialogue and activity that must occur to realize the NGM vision. Companies large and small, industry associations, national laboratories, government agencies, are invited to come together to develop and implement the concepts, practices, processes, and technologies of next-generation manufacturing. The Agility Forum, the Leaders for Manufacturing Program at MIT, and the TEAM program are committed to continuing the work started in this project. If you would like to provide input, seek further information, or participate in development and implementation efforts, please contact the NGM Project Office at the address shown in the front of this report. The organizations that have participated in the NGM Project over the past year-and-a-half will make presentations at conferences and workshops over the coming months to communicate the NGM visions, discuss the actions recommended to support implementation, and promote the alignment of goals, plans, and objectives essential to focusing the resources of the nation on the path to success. A schedule of these presentations is available at the Agility Forums web site, http:// www.agilityforum.org/
2.0
THE NGM ENTERPRISE A Vision of the Future
s manufacturing companies prepare for the changing global environment, there are several factors to consider in formulating their strategic responses. They face new and challenging dilemmas, within an expanding global marketplace. The need to satisfy increasingly demanding customer expectations, and the escalating complexity of technology, easily outstrip the ability of a single company to continue to meet those needs. Collaborative relationships can help, but how can one practice collaborative sharing of knowledge in an increasingly knowledge-based competitive environment? How does one preserve core competencies without practicing them all? Product and process lifetimes are plummeting, but plant and equipment complexity and system investments are rising. The constant change in the mix of skills required by any one company has led to more transient jobs, yet employee loyalty is more critical than ever as the wellspring of innovation and productivity for competitive advantage. What is causing these dilemmas and what can be done to address them? Consider the factors driving the trends we all see. Todays global economy is being driven by forces both timeless and new, the most evident of which are the increasing rate of change in the technological arena, and the increasing expectations of consumers all over the planet. This leads immediately to a vision of the NGM Company as part of a global Extended Enterprise, where concepts of company and country loyalty have been completely revised, and where teaming and knowledge sharing while competing are natural facts of doing business. The NGM Enterprise will leverage intelligent processes and flexible, modular equipment to enable new levels of flexibility and responsiveness, and will augment human decision power with knowledge-based systems tapping a rich storehouse of captured knowledge. Manufacturing will be optimized as a total system, using integrated, interoperable information systems to ensure delivery of the right information, to the right place, at the right time. Robust virtual production systems will enable simulation of the total enterprise, eliminating costly trialand-error development of products and processes. The ongoing technological revolution is giving us ubiquitous information technology, a global information network, and the ability to communicate anywhere, anytime, at high bandwidth. This, coupled with improvements in transportation, has made geography, once a primary factor in competitive manufacturing, essentially irrelevant. But that is not an advantage, it is merely a technological fact. What then, will a Next-Generation Manufacturing Enterprise look like? What are its attributes? Rapidly accelerating evolution of technology and global market forces also dictate responsiveness as an increasingly critical attribute. Customers will become ever-more selective, and demand total solutions rather than off-the-shelf products. They will require customized products with color, size, shape, and configuration tailored to specific wants and needs, delivered quickly, wherever they happen to be, with no reduction in quality or premium for customization.
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Customers will become evermore selective and demand total solutions rather than specific products.
To meet these demands, especially in the face of stiff global competition, companies will have to be distributed globally, with a network of factories, suppliers, distributors, and service centers across the globe. Small and medium-sized companies will be affected by these changes as they become integral parts of a global network, even if their own facilities never expand beyond this country. These global enterprises will be flexible and responsive, even though they are located in countries with different cultures, languages, and time zones. They will have to adapt to different values and financial conditions, and accommodate different government regulations. Because some enterprise functions will be too costly or difficult to duplicate, such services will be linked to the disparate factories and distribution centers, with 24 hour/day service, 7 days a week, regardless of location. In addition, the term emerging country is taking on a new meaning in the global competitiveness arena no longer a source of cheap labor, but instead a source of new markets. However, as developing nations enter the global economy, they also become competitors for high-technology jobs and market share. Hence, companies will have to balance the value of doing business in such regions against the risk of creating a fierce new competitor. How will a manufacturing company thrive in this environment? First, the company will move from providing point solutions to creating total, integrated solutions; no longer delivering just what is ordered, but what is needed; going beyond current requirements to meeting evolving requirements. The NGM Company will satisfy not just the customer, but all stakeholders. Competitiveness will be linked to meeting the needs of employees, stockholders, the local community, and those communities served by the company. A key transition will be from the accepted tenets of concurrent engineering and product/process teams to a more comprehensive and integrated form of rapid product/ process realization that includes all relevant stakeholders. Pervasive modeling and simulation will be a key enabler of this fundamental change in product realization strategy. Teaming is the key response to the dilemma of increasing expectations and limited resources, and is at the heart of the NGM Enterprise. No single company can own all the skills and experience necessary to meet all stakeholder needs. To enable rapid and seamless teaming, both within and between companies, we will move from individual loyalties to multiple loyalties and to team as well as individual contributions, with teams using extended enterprise collaboration techniques to operate as seamless virtual entities while both controlling and sharing intellectual property. Finally, a company will learn to control its core competencies, even as it physically moves these activities to a partner. By exploiting information technology in concert with the new flexible workforce and proactive change and innovation management processes, a true enterprise integration standard will emerge that enables
At least half the important new technologies that have transformed an industry in the past fifty years came from outside the industry itself... Peter F. Drucker, Managing in a Time of Great Change
rapid formation, efficient operation, and easy dissolution of extended enterprises, and supports that standard with a rich suite of tools and technology. Teaming will drive the evolution of a new type of workforce, far more flexible and responsive than todays. Companies and employees will move from an ideology of lifetime employment to one of lifetime employability; to a new social contract where individuals are rewarded for both labor and knowledge. Individuals will take increasing responsibility for their career development independent of specific companies, and will move toward a system of skill certification instead of conventional hiring and retraining as companies demand instant productivity in response to fast-breaking opportunities. The entire research, education, and knowledge transfer system will go from a series of isolated functions in schools, companies, and supporting organizations, to a knowledge supply chain designed and operated to provide integrated lifelong, K through 80 (K-80) education. The physical plant of the NGM Company, regardless of size, will also change to allow rapid adaptation to production demands. Plants with fixed capacity will be replaced with new concepts of variable capacity; fixed tooling methods will be replaced with processes and methods that require little up-front investment of time or money. Factories, both entire plants and the individual pieces of equipment, will leverage next-generation manufacturing processes and equipment technologies to be quickly reconfigurable. Rapid, flexible response by equipment suppliers will allow companies to bid with assurance, but only purchase or lease equipment if the bid is successful. Processes will become more autonomous, capable not only of automatic action, but actions that enhance their quality and flexibility. Intelligent, closedloop processing, wherein quality is assured in-process, will become the norm. Companies will develop global strategies and operate for maximum efficiency, with functions distributed around the world. Companies will be perceived as local within each market they serve, with operations and infrastructure tailored to local customer needs, but they will be driven by their global market positioning and will maintain maximum possible flexibility. In a fast-changing competitive environment, companies will create and dissolve extended enterprises without regard to national boundaries and will operate wherever the local infrastructure best suits their needs. The NGM Company will be an adaptive organization able to simultaneously deal with more conflicting issues than is currently thought possible. It will have mastered quality, speed, and cost, and will manage complex interdependencies with suppliers, customers, partners, employees, governments, communities, and interest groups by maintaining intense interaction with all. It will simplify and modularize business and technical processes, and product components, as a means for mastering complexity.
Touch labor employees are now required to do statistical process control, operate computer equipment...and work in cooperative team settings...not skills traditionally imparted in Americas educational system. William L. Duncan, Manufacturing 2000
The opportunity to lead the world in economically designed factories will require worldwide leadership of the equipment supplier base. Semiconductor Industry Association, National Technology Roadmap for Semiconductors
Globalization is being driven by ever-improving communications and information technology. National Center for Manufacturing Sciences, NCMS Collaborative Manufacturing Agenda
The NGM Company will apply integrated, adaptive, responsive information systems to configure and manage the enterprise, and will use virtual production tools to simulate, evaluate, and optimize all manufacturing operations. This capability will dramatically reduce the cost of product and process development, increase responsiveness, and mitigate many of the risks that now inhibit innovation. Knowledgebased systems will ensure preservation of core competencies, even when not exercised, and will ensure that the very best decisions are always made. The NGM Company will continuously evolve core competencies, organizational structures, culture, and business practices to anticipate and respond rapidly to changing customer demands and market dynamics. The NGM Company will manage innovation and creativity, not just productivity. Training in the management of change not just the acknowledgment of the need for change will be pervasive in industry. Metrics and standards for performance will be shared across all partners within and across the extended enterprise.
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3.0
GLOBAL DRIVERS
The Forces of Change for U.S. Industry
here are forces that affect every manufacturing company, all over the world. These forces exist regardless of actions by any individual, company, or nation. These are the drivers of change in the competitive environment, and they can be expected to persist into the foreseeable future. They are the top of the NGM framework, and drive all the subsequent actions, including definition of the NGM Enterprise Attributes presented in the next section. Regardless of the location or size of a manufacturing company, these drivers will have an impact, even if only through their suppliers and customers. And this impact will become more and more evident as companies form the extended enterprises envisioned for the next generation. Ubiquitous Availability and Distribution of Information With a global communications network becoming a reality, it is now possible to transmit and receive all types of information everywhere. The primary barrier to instantaneous global information is illiteracy, not lack of a communications infrastructure. Virtually every part of the planet can know how others are living, and all will strive for the highest standards. As a result, the constant human striving for greater standards of living is accelerating. This flood of information creates a new challenge to manufacturing enterprises. Since useful information is now universally available, competitive advantage has shifted from the ability to distribute information, to the ability to filter and act on the information. This becomes a strong driver of both information systems technology and the knowledge and training requirements of the next-generation workforce. Accelerating Pace of Change in Technology Technology and technological knowledge will continue to experience sustained rates of growth in no small part because of greatly enhanced information and communications technology. As our understanding of technology becomes greater, new developments come faster, leading to near exponential growth of ideas, inventions, and products. The increasing array of technology brings with it an explosion of technical knowledge necessary to operate in the next generation. This in turn drives an increasing complexity and interdependency in manufacturing enterprises as more and more knowledge is required to fulfill customer expectations. For example, rapid engineering and production technology changes place ever-greater demands on the manufacturing workforce, with some companies currently predicting skills obsolescence rates of up to 20% per year. Technology change also continues to drive productivity improvements that decrease the size of the U.S. manufacturing workforce. Just as agriculture, through innovation and productivity, has increased its output with a smaller labor force over the past decades, manufacturing labor is projected to decrease by about a million jobs
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Global Drivers NGM Attributes
Dilemmas
Soon anyone will be able to get any information to almost anyone they want to, whenever they want. And, more and more, information is being moved instead of people. John L. Peterson, The Road to 2015
...90% of all scientific knowledge has been generated in the last 30 years. This pool of knowledge will double again in the next 10-15 years... U.S. Department of Commerce
over the next 10 years. A smaller workforce does not decrease the importance of manufacturing, but demands consideration of how to develop additional good jobs both within and outside of manufacturing. Rapidly Expanding Technology Access Not only is the rate of technology development increasing, but technology is becoming universally available. Technological and scientific education are spreading worldwide. As a result, competitive advantage no longer depends solely on superior technology. This presents both an opportunity and a dilemma. Broad accessibility of technology enhances the ability to partner and globalize, but brings with it a need to constantly upgrade the companys technological capabilities, if only to keep even in the market. There is an ever-present risk that the capabilities of todays latest technology, acquired at considerable expense, will be outperformed tomorrow by something less expensive. It also has broad implication for the global workforce, where the current large differentials in technical skills between different countries are rapidly shrinking. One example of this is the rapid growth of software engineering in countries such as India, which have quickly developed a well-trained technical workforce. Globalization of Markets and Business Competition All of the above lead to a strong driver for true globalization; a drive not only to market globally, but to create wealth, infrastructure, and knowledge workers globally. Such demands create great opportunities, but can also create competitive threats. The purchasing power of developing markets results from their industrialization. The perception of the developed world that the need of developing countries is for jobs and products, rather than technology, is not always shared by those countries. Many developing nations demand the latest technology and also want to become global suppliers. Global Wage and Skill Shifts The globalization driver also provides a global pool of industrial workers, causing many job skills to become commodities and bringing wage values for traditional skills in the U.S. down from their historical premium to a level that is competitive in the world market. Within the U.S., collective bargaining across an industry had allowed wages to be removed from the competitive equation. With global labor supplies, this is no longer possible. A companys success is no longer solely dependent on success in any one market or nation. Companies are amplifiers of the technology, human resources, and infrastructure of a geographic region, improving them where they are strong, and avoiding areas where they are weak. The balance of responsibilities for regional development is shifting between industry, the community, and the individual.
New designs now travel at the speed of light. Dr. Don Clausing, MIT
NGM companies will be challenged to increase current standards of living in the U.S. while at the same time responding to the rapidly increasing demands for greater standards globally.
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Environmental Responsibility and Resource Limitations Global development is also increasing pressure on the environment and heightening tensions over world resource utilization. The U.S., with about 7% of the worlds population, consumes a disproportionate share of the worlds resources; the developed countries, with 15% of the worlds population, consume 50% of the worlds energy; and 99 of the 196 living Nobel laureate scientists have signed a statement that we are fast approaching many of the earths limits. As the developing nations increase their resource consumption, more efficient use of resources is essential to global survival. Environmental regulation is a symptom, but not the driver of this need. The importance of strategies to minimize resource use, maximize reuse, and apply environmentally conscious materials and processes in products and manufacturing will continue to grow. Best practices of recycling and conservation, applied to all business functions and all forms of resources, will become an accepted part of the next-generation manufacturing landscape, regardless of where the operations are located. Increasing Customer Expectations Customers demands continue to increase as they become more knowledgeable and as competition provides them with ever-better solutions. Manufacturers have learned that better solutions result when demands are not unilaterally made, but where solutions are worked out with suppliers. Supply chain management and closer relations with suppliers have taught the need for joint development of product and process specifications. This trend is extending to relationships with customers, with increasing capability to deliver goods and services tailored for individual customers and small market segments.
Almost 50% of Ford Motor Companys entire scientific research lab budget has been devoted in recent years to environmental issues. Alex Trotman CEO, Ford Motor Company
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4.0
NGM ATTRIBUTES
A Vision for the Next Generation
T
Global Drivers
he forces driving the evolution of the global economy are creating a competitive environment of continuous change, tremendous growth in knowledge requirements, and a global playing field in all dimensions of business.
The NGM Project, working from an understanding of this environment, and in consultation with many participants and contributors, has developed a concise set of attributes that define the NGM Enterprise that can best respond to these drivers. These attributes are equally applicable to companies large or small, operating individually or as part of extended enterprises, and must be addressed in an integrated fashion across all elements People, Business Processes, and Technology of the NGM Company. The Six Attributes of an NGM Company Customer Responsiveness Physical Plant and Equipment Responsiveness Human Resource Responsiveness Global Market Responsiveness Teaming as a Core Competency Responsive Practices and Cultures. In any endeavor to navigate the future, the question of maps or compasses arises. Are we seeking directions, or specific paths and destinations? A map is very helpful when looking for obstacles in a known topography. A compass is helpful when one is not sure where one is, and can get only a general sense of direction. The Attributes serve as the compass of NGM, and the Imperatives and Action Plan Recommendations (Sections 6.0 and 7.0, respectively) serve as an initial map for the migration to NGM. It is clear from extensive discussions with manufacturing executives that while some companies practice some elements of these attributes, none practice all. And it is the consensus of the NGM participants that companies that develop and integrate all of the attributes, with proactively responsive and integrated people, business processes and technology, will succeed and thrive in tomorrows business environment. Each NGM Attribute is developed in the following discussion, starting with a number of challenges that must be faced as we go from now to the Next Generation.
NGM Attributes
Dilemmas
I see our future as one of partnerships with our best customers. As we ally ourselves with innovative, growth-minded customers, and as we serve them well, we will prosper and grow along with them. Robert J. Darnall, Chairman & CEO, Inland Steel Corp.
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1. Customer Responsiveness The NGM Company will work with and in anticipation of customers to supply an integrated set of products and services to provide solutions that fit evolving life-cycle requirements of function, cost and timeliness. Now Point Solutions Deliver What is Ordered Meet Current Requirements Single Transaction Revenue Satisfy Customers Next Generation Total Integrated Solutions Deliver What is Needed Anticipate Evolving Requirements Life-of-Customer Revenue Satisfy Customers & All Other Stakeholders When asked if we will still have manufacturing companies in the 21st Century, one well-known expert responded, I hope not! He then went on to explain that manufacturing companies must focus on satisfying both current and future needs of the customer, rather than simply supplying a product. A car company satisfies transportation needs, and a computer company sells greater efficiency or broader capabilities to its customers. That is the essence of this Attribute, which embodies the NGM tenets of providing solutions, partnering, and proactive management of continuous change and innovation processes. To truly anticipate needs and keep them evolving, a much more intimate relationship (a partnership) between manufacturer and customer is necessary, whether the customer is next door or in a different country. This responsive anticipation and evolution will also reduce the turbulence brought on by learning customer needs only from reaction to prior products. Instead, the customer/supplier partnership will lead to a far more certain, albeit changing, marketplace where prediction is replaced by continuous interaction and planning. Finally, timely innovation will result from concentration on total customer needs, and exploiting the value of integrated packages of products and services. By taking the long-term view of customers, the NGM Company also focuses on the long-term revenue picture. Rather than viewing customers as a single-transaction source of income, a longer-term partnership with a revenue stream that spans the life of the customer relationship is developed. In a world of rapid change, this also adds to the stability of the enterprise. In the interconnected world of the NGM Enterprise, the relationships between customer satisfaction and other stakeholder satisfaction must be recognized. Employees, stockholders, and local communities all have needs that influence the actions of the company. These needs often conflicting must be identified, continuously assessed, and satisfied with a balanced response that strengthens the partnership of all.
Most of our major new products have come from the unarticulated needs of our customers and understanding that. William Coyne, Vice President of R&D, 3M Corporation
The No. 1 thing that will drive IBMs growth in the future is a total commitment to solutions, not piece parts. Were not selling a browser. Were not selling a 3-D engine for your PC. Were selling ways for companies to make more money. Lou Gerstner, CEO, IBM
General Motors Vice President for Consumer Development, after accounting not just for cars purchased and services rendered, but also for income from auto loan financing, figures that a loyal customer is worth $400,000 over a lifetime.
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2. Physical Plant and Equipment Responsiveness The NGM Company will use an ever-growing knowledge base of manufacturing science to implement reconfigurable, scalable, cost-effective manufacturing processes, equipment, and plants that can be rapidly adapted to specific production needs. Now Experience-Based Knowledge Process Development Lags Product Needs Dependence on Hard Tooling Automatic Equipment Fixed Capacity Fixed Mission Plant & Equipment Next Generation Science-Based Knowledge Process Development Leads Product Needs Soft Tooling & Tool-less Processes Autonomous Equipment Variable Capacity Recyclable Plant, Equipment, & Property
If a factory is producing a product with highly variable demand, then having a high utilization rate probably means that company is doing a poor job of responding to customers. Dr. Stanley Gershwin, MIT Manufacturing News, 15 March 96
The rapidly changing environment of the next generation will require a profound increase in fundamental knowledge of manufacturing processes. No longer can slow accumulation and inefficient transfer of experience be the means for understanding processes and systems of processes. This is necessary not only for better quality and productivity, but for quicker and more innovative new processes, inherently suited to the NGM environment. When customer requirements change rapidly, physical processes are typically the slowest-changing link in the market/product/process/distribution chain. With its greater fundamental knowledge and enabling technologies, the NGM factories can be the fastest link in the chain. As a result, greater latitude in satisfying diverse customer needs and demands will in turn enhance the product development functions of the extended enterprise. A major impediment to quick response is dependence on complex custom tooling to achieve necessary quality. A transition to fewer toolingdominated processes and development of more flexible or soft tooling can radically enhance mission flexibility and reduce the time required to take products from concept to development and production. Machines are now routinely automated, but few are truly autonomous. Product quality and new product start-ups still require considerable supervision and ad hoc adjustment. A transition to machines capable of self-correction, self-diagnosis and on-line quality monitoring will greatly enhance the responsiveness of manufacturing facilities. This intelligent, closed-loop processing capability will dictate a new and deeper understanding of manufacturing processes and the integration of process technology, information management technology, and equipment responsiveness. Variable capacity is a major issue, and it is not solved by outsourcing; this simply transfers the problem to a vendor. Instead, it requires in16
novations in hardware, such as flexible processes, and also innovations in managing plant and equipment. For example, one manufacturing company interviewed leases production equipment only after getting an order thereby matching product, product lifetime, and equipment. When the order is filled, the leases are up. In the NGM environment, the missions of specific facilities will change more rapidly, and the need to reuse or recycle equipment, plant, and even property will be more frequent. Designers of equipment and factories, and even the siting of plants, must no longer assume single missions and long lifetimes, but instead think of the entire complex as a recyclable entity that can be rapidly and economically adapted to new uses. 3. Human Resource Responsiveness The entire workforce of the NGM Company will comprise highly capable and motivated knowledge workers who can work in a flexible work environment, with substantial independent decision-making. Now Lifetime Employment Company Plans Career Next Generation Lifetime Employability Individual & Company Jointly Responsible for Career Individual Provides Labor & Knowledge Universally Recognized Skills Certification Knowledge Acquisition Managed by Supply Chain Principles
Individual Provides Labor Hire and Retrain Ad Hoc Knowledge Acquisition
Future jobs will be restructured about every seven years, and work and learning will be inseparable.
David Kearns, CEO, Xerox Corp.
The U.S. workforce is in a high state of flux. The Department of Commerce estimates that we are experiencing a skill obsolescence rate of 15% per year; many major corporations quote a figure of 20%. With job turnover increasing, the largest private employer in the U.S is Manpower, Inc., with over 700,000 employees. This dramatic state of continuous change will require new workforce practices, with an emphasis on adapting to the dynamic requirements of the enterprise. Central to this attribute is the ability of all individuals to develop and evolve a set of skills that make them true knowledge workers who remain valuable to the enterprise, and keep them continuously employable anywhere in their industry. This state of change will require a change in the implicit social contract that has existed in many large firms. De facto lifetime employment, which leads to task-specific training, will be replaced by overall employee knowledge development. In the next generation this responsibility will be shared, but guided by the individuals as they enhance their skill set and prepare to work for several employers rather than just one or two. Continuous change will require concomitant continuous learning, leading to a true K-80 educational system.
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One manufacturer estimates they will spend about $7 million per employee over a 30-year career; considered as an asset, the value of such a workforce far outweighs all other assets.
Many U.S. firms have instituted education policies aimed at increasing the overall knowledge of their workforce. Motorola has a stated goal of increasing their training to 7% per year (~1 month/year). They acknowledge that this will increase the value of the employee, but it also may mean greater turnover, as the employee becomes attractive to other companies. This makes the worker more employable, and increases the pool of knowledgeable people available to all companies. The timeworn statement: forget what you learned at your last job, now well show you how we do it here will be scrapped in favor of a process of universally recognized certification of skills that allow both employee and employer to realize immediate productivity in new assignments and jobs. Responding to rapidly changing enterprise needs will not allow for long periods of re-learning. Instead, a common set of recognizable and portable skills will have to be developed. Even this, however, does not protect against sea change technology shifts that can make recognized skills, learned with effort and expense, obsolete very quickly. Knowledge workers, like companies, will have to be highly adaptive. In the next generation, the knowledge of the workforce will become a distinguishing competitive factor, and the NGM company must learn new ways of gaining, retaining, and expanding their knowledge base. This will be managed much as todays supply chains are, except that participants will now include universities, K-12 schools, trade schools, unions, and employee associations as well as corporate training programs. Just as a material supply chain is managed as a partnership, so too will this newly recognized knowledge supply chain. 4. Global Market Responsiveness The NGM Company will develop a manufacturing strategy to anticipate and respond to a continuously changing global market with its operations and infrastructure tailored to local requirements. Now Market Globally R&D in Home Country Foreign Company with Local Investment U.S. Market Share Next Generation Operate Globally R&D Dispersed Perceived as a Domestic Company in Each Market Global Market Share
We need ...a wholesale elevation of the American workforce through lifelong education, not simply onthe-job training. George David, CEO, United Technologies Corporation
80% of all cars are owned by 20% of the population. U.S. automakers expect all significant growth to be outside North America and Europe.
Many companies have had international operations for decades; however, few are truly global companies. The steps toward globalization begin with offshore marketing, followed by offshore production with goods imported back to the U.S., and then global operations evolve that sell primarily to their local markets. Ultimately, as the NGM company becomes global, its local operations will be indistinguishable from an indigenous company. This is because most company functions can be performed locally, with citizens of the local community. This global NGM company will place any or all of its functions, including research and development, in whatever location is most advan18
Motorola estimates its U.S. revenues will be only 20% by the year 2000.
tageous. Such local operation is far more responsive than one centralized in the home country. As one CEO of a high-tech firm put it, we use local design engineers because they best know the needs of the equipment and of the local markets. Likewise, Caterpillar designs all of their small excavators in Japan because the requirements for that product there are the most demanding. Understanding local markets, cultures, and politics is essential to the responsive, global company. Traditional drivers of low labor costs, transient tax advantages, or less stringent environmental regulations will be less dominant factors in siting of plants and operations. Instead, companies will operate to accommodate local customers and other local stakeholders, serving local community and employee needs.
Traditional products and services will become part of a larger overall system to provide lifecycle solutions.
As the NGM company seeks to market and operate globally, its focus will be on global market share. This will diminish loyalty to any one region, and responsibility for a regions well-being will shift to the community and individual. Communities must respond more than ever with attractive workforce skills, education systems, and infrastructure. 5. Teaming as a Core Competency The NGM Company will practice teaming and partnering, within and outside the company, to bring needed knowledge and capabilities rapidly to bear on development, delivery, and support of their customers and markets. Now Control Intellectual Property Hierarchical Power Structures Reward Individual Contribution Physically Practice Core Competencies Loyal to your Unit Next Generation Control & Share Intellectual Property Shared Decision Making Reward Individual & Team Success Control Knowledge of Outsourced Core Competencies Multiple Loyalties
We dont claim to have all the answers, just the partnerships to find them. Compaq Corp. Advertisement
The increasing sophistication and demands of the market will leave those companies relying only on internal resources in a continuous state of catching up as they try to acquire the knowledge and skills required for new customers. The NGM company will avoid this problem by elevating teaming and partnering to a core competency. This includes strengthening teams formed as part of conventional material supply chains, teams within the diverse parts of their own organizations, teams with education and research institutions, and teams with customers. Sharing power is one of the most difficult things for those with power to do, but competitive circumstances demand it. NGM enterprises will find ways to thrive in such conditions. It is very clear that mid20th Century assumptions about how organizations get work done are no longer completely viable. This cuts several ways. The scope of hierarchy has evolved so that people share power; within small teams,
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task forces, and other groups, between corporations, and institutions, and across borders and cultures. Additionally, no single organization can be completely integrated, from raw materials to end of product life. The struggle is to create a work environment that nurtures a deep level of commitment that is not based on old assumptions of lifetime employment. Much of the best thinking centers around teams people working in groups, in partnership, to accomplish their collective (enterprise) goals. Teams built only on legalistic frameworks are slow to form and hard to terminate. Information is seldom shared, and local versus team loyalty prevails. However, with patience and trust, new forms of partnership, focused on the common goal of ultimately satisfying the customer better than competing enterprises, can evolve. These new teams will form on short notice and can be quickly dissolved when the need is gone. The NGM company will develop this teaming capability throughout its enterprise and create a new culture wherein loyalty, trust, and information sharing are practiced within a transient team nearly as easily as within conventional company boundaries. As more core activities are outsourced, the company must learn how to retain its basic skills even as it gives up activities to a partner. For example, one U.S. car manufacturer now outsources all of the engineering and construction of new plants, despite the fact that they have a strong knowledge of the production processes and years of plant launch experience. However, to preserve that experience, and to create a deeper partnership, they have some of their employees join the suppliers team. Another example of such intimate partnering is the Volkswagen assembly plant in Brazil. Referred to as the Consorcia Modular, the assembly line comprises a series of cells where the individual part vendors not only supply the parts, but actually assemble them into the car. A single master from VW serves to integrate this team. 6. Responsive Practices and Cultures The NGM Company has the continuously evolving core competencies, organizational structure, culture, and business practices that enable it to anticipate and respond rapidly to changing customer demands. Now Next Generation Teach Productivity Teach Innovation & Creativity Teach the Need to Change Teach the Process of Change Customer Satisfaction All Stakeholders Satisfaction My Standards & Metrics Our Standards & Metrics Competing for Existing Market Creation Through Markets Innovation The NGM company must develop a culture that embraces rather than resists the new manufacturing environment. As stated earlier, this new environment comprises continuous change, increasing dependence on knowledge and innovation and greater partnering, locally and globally.
A medium-sized electronics firm characterized itself as truly global, and quite adept at anticipating customer needs. However, they felt their biggest shortcoming was the inability to team both inside and with other firms.
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As a company increases productivity, it must grow revenue at a matching rate to avoid layoffs, or it must switch to new, higher-value products and services that grow the business base commensurately. High margins come from these new high-value solutions, and these require innovation. The fundamentals of productivity are well understood and taught, but there are no codified fundamentals of innovation. Accordingly, the NGM Company must teach both innovation and the process of change to enable this. It must not just have the answers, but also live the question, always looking toward the next problem. Diversity resulting from teaming and collaboration must be reflected in shared metrics. Cooperation is impossible if both partners continue to act based on conflicting, functional, or company-based metrics rather than on unified goals of the partnership. Unfamiliar values of other partners must be understood and dealt with. By methodically institutionalizing the process of change, by creating and institutionalizing the new forms of employment and employability enhancement, and by making global operation as seamless as if next door, the culture of change and responsiveness can become permanent, and continue even as changes in leadership take place. METRICS: Measuring Progress Toward NGM Goals Companies seeking to develop NGM attributes face significant challenges in developing and refining the enabling practices, processes, and technologies, and in navigating the many dilemmas and barriers that will arise on the path to the future. It is thus essential that companies define and apply appropriate metrics to measure progress.
Business strategy will focus on metrics that drive the right behavior... U.S. Department of Defense 1997 Defense Technology Area Plan
The list below illustrates metrics that quantify the progress of a company or enterprise toward attaining NGM attributes. They predict business success, measure outcomes rather than efforts, and are sufficiently simple to implement. They should be monitored over time to assess the performance of the company relative to its peers and industry sector, and should be monitored in suppliers, customers, partners, and competitors. In italics are examples of how each metric might be measured. Some of these metrics reinforce qualities that leading companies already acknowledge as desirable: Average annual time reduction for all work processes (not only manufacturing processes) Example: 17% per year reduction Average annual cost reduction for products and services in constant value dollars Example: 3% per year reduction Training effort Example: training effectiveness by performance of employees in accreditation testing
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Export success Example: 45% of revenue is from non-U.S. customers The average percent of the cost of products and services spent with suppliers Example: 79% to suppliers, 21% internal Innovation Example: new product and service offerings are 12% of the total sales Operational effectiveness Example: 95% on-time schedules at all levels Customization of product or delivery process Example: ratio of customized to standard orders is 56% Other metrics highlight new dimensions of the business that respond to the new business environment. The skill scope of core people Example: the average number of job classifications of core people is 11.3 The scope of core facilities Example: the quantity of products (stockkeeping units) made in a facility is 840 The turnover of core people Example: 10% of core people left the company in the previous year The turnover of core productive facilities Example: the annual investment in core facilities is 11% of the total investment in core facilities Rate of Organizational Change Example: Average lifetime of an organizational unit Pervasiveness of Change Example: Turnover of executive and management responsibility descriptions.
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5.0
DILEMMAS
The Challenge of Managing Continuous Change
espite the current positive climate, discussions with U.S. manufacturing executives have highlighted numerous dilemmas faced by todays businesses. These dilemmas often result from the clash of present practices with new global drivers. Future competitive advantage lies in the successful resolution of these dilemmas and will require the same kind of innovative thinking that solved similar challenges in the past. For example, the transition from mass production to lean production can be attributed in large part to breaking the dilemma of simultaneously attaining low cost and high quality. An understanding of quality and just-in-time material management broke the dilemma of how to have low inventory and rapid response. Dilemmas are signposts of opportunity; those who first resolve them will lead the transition to Next-Generation Manufacturing. Dilemmas for the Enterprise How to Have Employee Security without Lifetime Employment Good performance, company loyalty, and doing what is asked no longer guarantee lifetime employment. As accelerating change causes rapid skill shifts and turnover in the labor force, workforce flexibility is increasingly a competitive advantage. At the same time, companies are increasingly dependent on worker loyalty. Innovation, discretionary effort, team-based work, and lean organizational structures are all based on greater security and commitment of the employee. The paradox for enterprises is that the very actions that now make them competitive also drive the workforce insecurity that undermines the new high-performance workplace. How to Simultaneously Satisfy all Stakeholder Needs Those with a stake in enterprise success include the employees, investors, customers, suppliers, and the communities served by the enterprise. The enterprise cannot be successful without satisfying all of these interdependent stakeholders, although what satisfies one stakeholder may often displease another. This is further complicated as companies become larger and more global, with stakeholders becoming more diverse and dispersed. How to Practice Collaborative Knowledge Sharing within KnowledgeBased Competition Teaming and partnering leverage the knowledge and resources of multiple entities to generate new solutions that neither could achieve alone. As knowledge becomes the only sustainable competitive advantage, companies are faced with having to share what is most valuable to them, making it available to potential competitors. How to Control Core Competencies without Owning Them As a company outsources elements of its operation to other parts of the enterprise, it risks losing control of, or expertise in, related core competencies. Knowledge of outsourced competencies must be maintained without internally practicing or owning them.
Dilemmas
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How to Recover Rising Plant and Equipment Costs with Shorter Product and Process Lifetimes The current trends of increasing production capital costs and decreasing product lifetimes can only lead to a situation where the capital investment cannot be justified over the short product life. Outsourcing shifts responsibility for the problem, but does not solve it. Someone in the value chain owns the equipment, and these costs must be recoverable to support demands for increasingly sophisticated and expensive manufacturing systems. How to Foster New Markets without Creating Competitors Emerging markets in developing economies are fostered by industrialization that increases the standard of living and provides the purchasing power to buy products and services. The very industrialization that creates these new markets for an enterprise, however, also creates potential competitors. How to Reward Learning in a Reward for Doing Environment As knowledge become the most valuable asset of a company, workforce development is a critical long-term competitive need; the current system, however, rewards only near-term performance. How to Profit from Long-Term Relationships when Customers, Suppliers, and Partners are Becoming Less Loyal How can companies form strong partnerships with complementary suppliers, partners, and customers while retaining the flexibility to team with different partners to pursue new opportunities? How Does a Capitalistic System Manage Knowledge Assets, the New Discriminator, when the Assets Belong to the Knowledge Workers? Human capital isnt like physical capital. You cant own human capital, so investors are reluctant to invest in it. Dilemmas for the Nation How to Keep Domestic Jobs and Develop Global Markets Increasing sales to offshore markets stimulates growth of the U.S. economy. How can the U.S. develop these emerging markets while preventing declines in the skills and wages of the American workforce? How to Maintain National Economic and Military Security with R&D Increasingly being Done Commercially and Globally High-technology R&D has been a fundamental contributor to U.S. national security. Declining defense R&D, combined with global industrial operations that increase the amount of technology developed abroad, undermine this basis of our economic and military security. How to Deal with Transnational Corporations Transnational corporations have no loyalty to any given country. They want to freely develop or shift any aspect of their business anywhere at any time. Knowledge is recognized as the new capital, but transna24
tional companies move it across borders without governments being able to track it, let alone tax it or prevent it. However, attempts to regulate activities of transnational corporations may cause them to relocate beneficial operations from any country attempting to do so. Dilemmas for the Individual How to Have Good Jobs with Individual Security While Employed in Flexible Workplaces Individuals need the security and benefits of a traditional good job, yet the companies best able to provide traditional good jobs need workforce/workplace flexibility to be competitive.
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6.0
NGM IMPERATIVES
Creating the New Practices, Processes, and Technologies
he NGM Attributes describe the future enterprise. To develop a set of Action Plan Recommendations to attain these attributes, the NGM Project team identified the key barriers and identified enabling practices and technologies that, if appropriately applied, will cut through the barriers and resolve the dilemmas facing companies today. These enablers are so essential to realization of the NGM vision that they have been termed Imperatives. Grouped according the elements of the NGM enterprise concept, these Imperatives are: People-Related Imperatives Workforce Flexibility Knowledge Supply Chains Business Process-Related Imperatives Rapid Product/Process Realization Innovation Management Change Management Technology-Related Imperatives Next-Generation Manufacturing Processes and Equipment Pervasive Modeling and Simulation Adaptive, Responsive Information Systems Integration-Related Imperatives Extended Enterprise Collaboration Enterprise Integration. The NGM team has developed reports for each Imperative (see Volume II, Imperatives for Next-Generation Manufacturing) that detail their importance to realizing the NGM vision and identify immediate and longer-term actions that companies, consortia, academia, government, and individuals working individually and collectively can take to bring them to fruition. This section of the report provides a summary of each Imperative paper, addressing: Importance in the context of the NGM drivers and barriers Key concepts What is new about the practice, process or technology Recommended actions that address the gaps in todays best practices. The full text of all of the Imperative papers is available from the NGM Project Office.
Dilemmas
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6.1 Relationships Among Imperatives The NGM Company must incorporate aspects from multiple imperatives simultaneously while balancing the needs and resource constraints of the organization. All of the imperatives are highly interdependent e.g., Enterprise Integration defines needs for Adaptive, Responsive Information Systems, Workforce Flexibility, Knowledge Supply Chain, Extended Enterprise Collaboration, Change Management, Rapid Product/Process Realization (RPPR), and Innovation Management. Similarly, RPPR needs the other nine Imperatives to achieve its goals and objectives. Change Management and Innovation Management are also highly interdependent, as are Pervasive Modeling and Simulation with Adaptive, Responsive Information Systems and Knowledge Supply Chains with Workforce Flexibility. Over time, as the actions suggested in the Imperatives are implemented, the people, business processes, and technologies of the NGM Company will evolve into a dynamic network of integrated work units, each of which can be represented as an NGM enterprise. In implementing actions to develop NGM Attributes, there is a strong need to simultaneously address all actions from an integrated People, Business Process, and Technology viewpoint across all elements of the enterprise to realize desired results (Figure 6.1-1).
People
The NGM Company

Figure 6.1-1. The NGM Company will pursue all imperatives in an integrated fashion among its people, its business practices, and its technology.
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Abstracts of the NGM Imperatives

People-Related Imperatives
Workforce Flexibility
Workforce/workplace flexibility is a new set of practices, policies, processes, and culture that enables the employee to feel a sense of security and ownership while enabling a company to capitalize on the creativity, commitment, and discretionary effort of its employees, and at the same time maintaining the flexibility to continually adjust the size and skills of the workforce. Why is it Important? The demands of partnerships and requirements for control in global extended enterprises, coupled with the benefits of rapidly changing technologies, will force companies to continually adjust the size and skill sets of their workforce to remain competitive in the next generation. At the same time, the need for speed and innovation requires companies to use and reward the knowledge assets of all employees. As a result, the next-generation workforce and workplace will be radically different from present. It will be characterized by high dependence on discretionary effort and innovation throughout the workforce, lifelong learning as part of the everyday worklife, and new levels of teaming and partnering, where leadership is shared and trust is inherent in the corporate culture. Key Concepts Discretionary Effort: Competitive success is driven by levels of performance far beyond mere fulfillment of job descriptions. This level of commitment of the whole persons mind and effort only comes when the individual feels ownership of a task and is recognized and valued as an asset rather than treated as an expense. Lifelong Learning: Rapid skills obsolescence requires continuous learning. Individuals and companies share responsibility for this learning, and individuals must provide for themselves what companies do not. These skills ensure their economic security and provide the source of innovation required by the enterprise. Shared Leadership, Teaming and Partnering: Teaming requires sharing of power; shared power requires new levels of trust; sharing power and trusting the workforce revise the roles of the traditional managers; leadership and shared power will shift the control/innovation balance away from control towards innovation The Role of the Individual, Company, and Community in the Extended Enterprise: As companies compete as part of extended enterprises, they increasingly depend on human resources that are not members of their own company. All members of nextgeneration workforces will have to be recognized and treated as
The concept of...a secure job with a large stable company for an indefinite period is obsolete. The trend is toward ad hoc work, in which small, multifunctional teams attack a specific, life-limited project. National Center for Manufacturing Sciences, NCMS Collaborative Manufacturing Agenda
The workers will own the knowledge, but the company will not necessarily own the workers... Peter F. Drucker, Managing in a Time of Great Change
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equal and empowered partners who operate with a sense of ownership for the enterprise. Companies will locate where the infrastructure of skilled human resources and technology pull exist. Enterprises amplify these positive characteristics by partnering with the community and individual. Companies can not develop this infrastructure alone. Whats New? Workforce Flexibility implies both workforce and workplace flexibility. The task for achieving such flexibility cannot fall solely on the people that comprise the traditional wage-earning workforce; the practices and policies that define and govern the workplace and organization must also change. Some new practices are: Negotiating for mutual gain New mediating institutions for knowledge workers moving across organizations Job/skill placement associations that help individuals locate and obtain new assignments Skills certification to facilitate transferability between enterprises and enable instant productivity Portable pensions and benefits. The future workforce cannot be the segmented body that exists today. It must be recognized as an integrated body where everyone is both labor and management; provides both knowledge and leadership; is both a leader and a follower; is responsible for both productivity and innovation. All are owners responsible for providing the products, services, and results that satisfy all the enterprises stakeholders, but in so doing all share in the rewards and risks that result from meeting customer and stakeholder needs. As a result of all of these forces, a set of new Social Contracts are needed that extend beyond workers and management to include the individual, the extended enterprise, and the community. All elements will share responsibility for workforce development and learning will become as important as producing. Action Recommendations 1. Establish a Workforce Laboratory to identify and pilot practices required for a New Social Contract A laboratory is needed to identify the features of new social contracts suited to the economy of the future and to promote experiments needed to develop them. A Workforce Laboratory would provide a forum for all stakeholders to jointly research and evaluate current developmental practices and needed innovations for a successful new social contract. Research topics would include methods to: Enhance information sharing on issues affecting the enterprises, industrys, and individuals economic security, while enhancing an enterprises flexibility to use resources efficiently.
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Enhance worker commitment and teamwork by providing a greater a voice on the job and greater workforce democracy. Provide training for sustained employment while promoting worker commitment to lifelong learning. Establish cooperative rather than adversarial union/management partnerships in unionized industries to enhance workplace problem-solving and enterprise decision-making. Expand mediating institutions to facilitate job transitions and representing the voice of the worker. Streamline legal policies to support new social contract relationships.
Knowledge Supply Chains

Knowledge supply chains are a new concept aimed at radically improving the supply and dissemination of knowledge throughout manufacturing organizations. They do so by applying concepts of supply chain management to the relationships between industry, universities, schools and associations to rapidly provide and continuously update the knowledge and talent needed to run businesses in a timely and cost-efficient manner. Why is it Important? Knowledge is a key enabler of innovation, productivity, and ability to meet the true needs of customers. The cost of lack of knowledge is prohibitive. It leads to non-competitiveness and eventual failure. Key Concepts Knowledge is something that is sourced. It is a transferable commodity that can be specified and acquired. There can be significant improvements to a companys or an enterprises knowledge and talent acquisition process through application of supply chain disciplines and emerging supply web management principles. These include: Reduced knowledge shortages Lack of knowledge is a shortage, and application of supply chain management principles to the enterprises knowledge processes will help eliminate knowledge and talent shortages. Improved productivity of the knowledge acquisition process The knowledge supply chain can dramatically improve productivity of the knowledge acquisition process. The 20% cost reductions and 50% cycle time reductions achieved using supply chain principles for parts, subsystems, and materials are repeatable for knowledge. Whats New? Treating knowledge as a transferable commodity. This concept applies to both explicit knowledge (books, defined processes, codified information) and knowledge embodied in people. Changing the knowledge supply process from a push to a pull system, where the defined needs of the customer provide a unified purpose for the total knowledge process.
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Technology is making skills and knowledge the only sources of sustainable strategic advantage... Lester C. Thurow, The Future of Capitalism
Academia, as a major supplier of knowledge through research, education, and supply of talent, must be an integral partner in industry knowledge supply chains. Adapting the learning of the last 10 years in the material supply process to the knowledge supply process. Knowledge supply chains can be immediately implemented by individual companies working with their existing knowledge suppliers and systems to better integrate elements already engaged in knowledge-related activities. Action Recommendations 1. Pilot the development and use of simple knowledge supply chains. The simplicity and practicality of knowledge supply chains is that they are immediately doable. The first step is to get companies, communities, and academic institutions to start developing and using them. Then, as was the case with material supply chains, this activity of doing will stimulate and support the other necessary actions in research and sharing of best practices. The importance, feasibility, and benefits of knowledge supply chains will need to be documented and publicized. This process can leverage similar efforts for the material and technology supply chains. 2. Document best practices of prototype knowledge supply chains. Expand the documentation process to include working prototypes that cover all aspects of the K-80 education and training process, for all skill levels from entry level to senior executives. Other examples from non-traditional knowledge systems include workbased learning apprenticeship programs and the athletic knowledge process. 3. Individual companies can document knowledge/technology requirements to provide pull for the knowledge supply chain and enable academic institutions to tailor solutions to meet these needs. 4. Document best practices of industry and academic partnerships. The ultimate success of many knowledge supply chains will depend on development of strong, trust-based partnerships between industry and academia. This requires an improved understanding of each others needs and cultures, and development of new reward and recognition systems that support these partnerships. 5. Apply research from related fields to expand the effectiveness and efficiency of knowledge supply chains. These include: Material and technology supply chains Learning organizations Principles of knowledge generation Tacit knowledge How to document and transfer tacit knowledge.
The U.S. must ...encourage longterm systemic change in K-12 education to raise the basic skills benchmark...and strengthen the school-to-work transition. Ernst & Young, Electronics 93: The New Global Reality
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Business Process-Related Imperatives
Rapid Product/Process Realization

New design processes for products and processes will require systems for rapid prototyping, factory optimization, and advanced computer-based architectures. Computer Science & Telecommunications Board, Keeping the U.S. Computer Industry Competitive
Rapid product/process realization (RPPR) is an expected outcome that results from the integration of customer needs and wants, a systematic Integrated Product/Process Development (IPPD) methodology, cross-functional Integrated Product Teams (IPTs), and a Computer-Integrated Environment (CIE). It is accomplished by including all stakeholders, from concept development through product disposition, in the design, development, and manufacturing process, in a highly concurrent manner. Why is it Important? A fast-to-market strategy is among the most important success factors for manufacturing companies. Past strategies have separated design from manufacturing, causing long lead times and costly product and process iterations. Present and emerging concepts aim at creating a highly integrated/concurrent environment in which manufacturing and all other disciplines strongly influence design decisions very early in the product realization process. Past strategies have performed well in reducing costs in the face of embedded costs due to design, numbers of parts, and expensive processes, which dictate that the majority of the product cost is determined early in the design process. Disjointed design, manufacturing, and business tools present a major barrier to companies ability to make the required decisions early in the process. RPPR methodologies and tools can help companies break through this barrier, providing greatly increased responsiveness to customer and market demands as well as tremendous cost savings. Key Concepts RPPR contains the elements to rapidly develop solutions by: Making the customer part of the development team Using a well-defined management systems strategy Using state-of-the-art interoperable information technology Using multi-disciplined teams trained in IPPD Maximizing use of the knowledge and expertise of its workforce Using metrics for control of the entire process. RPPR is achieved through use of advanced, integrated business, design, and manufacturing information and technology by empowered teams who conceive, design, develop, produce, and support effective and affordable solutions. Whats New? Integration of the customer and all activities in the conceptualizing, creation, support, and disposal of a product in a rapid optimization, tradeoff-driven environment. A key enabler is creation of interoperable business, engineering, and manufacturing hardware and information systems to enable rapid tradeoff decisions to be made among performance, design features, and manufacturing costs.
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Technology suppliers must be involved at early stages in product/ process design. NEMI Consortium, National Electronics Manufacturing Initiative
Mockups and actual testing will be replaced with rules-based design and performance modeling in simulation environments, both singly and in combination. Action Recommendations Specific actions to move to implement RPPR are as follows. The majority of these can be taken by individual companies or one or more companies working in partnership with industry associations, academic institutions, and government agencies. 1. Accelerate training and implementation of IPPD and IPT methodologies. 2. Develop a suite of integrated design tools that automate the optimization/tradeoff of performance, design, and manufacturing options. 3. Establish standards and tools to assure interoperability of design, business, and manufacturing tools. 4. Support maturation of emerging rapid prototyping capabilities, and the development of new solid, free-form fabrication techniques. 5. Support development and implementation of pervasive modeling and simulation capability.
Innovation Management
Innovation is the process of creating solutions, which includes both initial creativity and its successful implementation. Today, companies use innovation processes to improve everything from business practices to the technology used to develop and deliver products and services and to the development of the product and service itself. Modern innovators have gone from creating products to creating solutions. Innovative solutions become platforms for generating future innovations. Innovation tends to flourish where fundamental constraints are lifted, and/or where an immediate sense of urgency is present. Most current company models which attempt to harness the power of creativity and convert it into something marketable are restrictive. There is a real need to create an environment where innovation can be nurtured and facilitated. Modern innovation strategies and practices are essential for companies to position themselves to be competitive in the NGM environment. Why is it Important? As the level of competition becomes more intense due to accelerating continuous change in the environment, the ability to stay ahead of the wave becomes increasingly important. The NGM company must quickly generate solutions using evolving innovation techniques. Key Concepts Changes initiated to make people more motivated at work also serve to increase the level of innovation. People are the most critical element in the innovation process.
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Only by identifying and applying innovation to the critical path of our own development can we win. William L. Duncan, Manufacturing 2000
NGM companies must create an organizational structure, culture, and measurement & reward systems that encourage innovation. This includes placing value on risk taking and learning from failure in the creative process of innovation.
...Industry leadership in the 1990s means working in unconventional ways. Raymond J. Noorda, Former President, Chairman & CEO, Novell, Inc.
Whats New? Innovative behavior can be taught and learned. Companies that apply a systematic approach and rapidly make use of emerging technologies dominate their markets. These companies maintain this competitive position by reinforcing a new, innovation driven culture. Evolving information technology brings new opportunities to light through knowledge management. Companies that understand the value of long term effects of good innovation policy restructure their processes to facilitate strategic changes. Action Recommendations 1. Individual companies can develop a process to promote and reward innovation throughout all the operations of the business. They can require innovation as a prerequisite for management positions and form or join consortia to develop mechanisms for stimulating innovation in all facets of enterprise operations market development, product development, process engineering, manufacturing, supply chain management, customer service, etc. 2. Industry and academic associations and consortia can embrace forward-looking, cross-cutting programs like NGM as a way to institutionalize innovation in approaching problems that are beyond the ability of any one organization to solve.
Change Management
Change management in the NGM company is the continuous process of applying deliberate change to the current state of an organization to achieve a more competitive future state. The ability to spark innovation and turn creativity into continuous positive change may be the true competitive advantage for the NGM company of the future.
...A structured change management process and change support procedures will become paramount to success. William L. Duncan, Manufacturing 2000
Why is it Important? As the level of competition becomes more intense due to accelerating continuous change in the environment, the ability to implement change inside the NGM company becomes increasingly important. The objective is to minimize internal disruption in the midst of continuous change through the use of evolving change management techniques. Key Concepts Any organization, acted on either from the inside or from the outside, will change. It is the function of leadership to understand the need for change and to channel the efforts of the company to change in ways
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The companies that succeed in the long run will be those with the courage to quickly transform their business to capitalize on change. John Scully, Former Chairman & CEO, Apple Computer
which increase its competitiveness over time. The focus of change within the NGM company must be routinely re-prioritized and coordinated. NGM companies must maximize efforts in high leverage areas and avoid optimizing any one segment at the expense of the total system. The basic targets of change management (things that get changed) are: Strategic direction Organizational culture Processes (how any work gets done) Individual task behaviors. Whats New? The process of continuous change is now a fundamental business process (like accounting, marketing, manufacturing, etc.), and the NGM company must be dedicated to its performance. In general, all change process models have these basic elements: Recognize the need to change Define and articulate a desired future state Develop a clear and detailed assessment of the current state Design an integrated activity plan for the transition period Focus and sustain commitment of the organization to change Reassess the need for change and start the process all over again. Action Recommendations 1. Companies can implement systematic change management processes including risk/benefit analysis and change implementation methodologies that build bottom-up consensus for change. 2. Companies can use current analyses and models of change to make current change management policies more effective in existing enterprises.
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Technology-Related Imperatives
Next-Generation Manufacturing Processes & Equipment

Next-generation manufacturing processes and equipment are reconfigurable, scaleable, and cost-effective manufacturing processes, equipment, and plants implemented by developing an ever-growing knowledge base of the science of manufacturing, and used to allow a company to rapidly adapt to specific production needs. Why is it Important? Global competitiveness and, particularly, responsiveness to changing needs, dictates that NGM companies have a better understanding of their core competencies and manufacturing processes and that the factories be quickly and efficiently reconfigurable to meet changing needs. Companies and enterprises that possess such understanding and flexibility will beat competitors to the market with cost-effective products. Next-Generation Manufacturing Processes and Equipment are necessary to achieve the following NGM attributes: Customer Responsiveness: by allowing optimal choice of processes and equipment to meet customer needs within an extended enterprise Physical Plant and Equipment Responsiveness: by using modular and reconfigurable processes and equipment Global Market Responsiveness: by developing deep knowledge of foreign processes and equipment technologies to allow rapid response to foreign opportunities Teaming as a Core Competency: by allowing members of an extended enterprise to share processes and equipment knowledge while maintaining core competencies. Key Concepts To achieve this end, a company must: Evaluate new processes and equipment in anticipation of changing customer needs Improve corporate understanding of manufacturing processes (core competencies) and how these processes affect the quality, producibility, reusability, and disposability of products Develop and employ highly capable and motivated individuals as team members to optimize manufacturing process configurations Encourage teaming and partnering to acquire all needed capabilities for implementation of optimized process configurations Develop standards for equipment and software to securely communicate, store, organize, retrieve, and process manufacturing information within the extended enterprise.
Manufacturing technology... investments improve competitiveness by reducing costs and increasing speed to market and customer satisfaction. National Center for Manufacturing Sciences, NCMS Collaborative Manufacturing Agenda
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Whats New? Information technology will secure an ever-greater influence on manufacturing equipment and shop-floor manufacturing processes. Information from the IPPD and RPPR processes will drive the semi-automated construction of detailed process plans. Process planning software will be created from the specialized knowledge of skilled craftsmen, engineers, supervisors, maintenance personnel, and process planners. New software tools installed in more powerful general-purpose workstation will allow many alternative manufacturing processes and equipment configurations to be simulated and evaluated before work is released to the floor. Process plans and alternative processing configurations will be searched and recalled from data archives. Using new information technologies, extended enterprise partners will share historical process plans to evaluate alternatives when considering future production options. Modular machine tools and controls will allow rapid configuration of factories from discrete process equipment and modular control equipment. Open-architecture controllers will be automatically programmed and configured to operate for either small or large lot sizes based on information contained in detailed process plans. Modular processing equipment will allow complex processing machinery to be assembled from smaller, well-characterized subcomponents. When a production run is completed, the processing equipment will be disassembled and stored for reuse in similar or new configurations. Action Recommendations 1. Develop a new Process Design Workstation, enabling process engineers to continuously improve understanding of manufacturing processes and create optimized process configurations. 2. Develop new Intelligent Processes and Equipment hardware to implement optimized process configurations on the shop floor using modular machine tools and modern computer control equipment. 3. Develop a Collaborative Manufacturing Environment to supply knowledge to process designers and shop-floor employees to enable factory operation as an extended enterprise.
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Pervasive Modeling & Simulation

In the NGM Enterprise, modeling and simulation (M&S) will reflect a new way of doing business rather than a supporting technology. It will make virtual production a reality. All production decisions will be made on the basis of modeling and simulation methods, rather than on build-and-test methods. M&S tools will move from being the domain of the technologist, to being a tool for all involved in the product realization, production and business processes.
There is a critical need for interoperable, seamless computer software tools for product/ process depiction, visualization, analysis, and animation. National Center for Advanced Technologies, Aeronautics Materials & Manufacturing Technology Working Group Report
Why is it Important? M&S will eliminate the need for developing hardware prototypes and allow for lot sizes of one. This will dramatically decrease time-to-market for new products and services. It will provide products and services optimized for the customer and other stakeholders. It will require significantly fewer resources in the development process than build-and-test methods. Key Concepts The entire enterprise, spanning multiple organizations, will be modeled and simulated prior to production. Tradeoffs will be made at all levels to optimize the design, the plant, the equipment, and production processes. Individuals using M&S tools will gain specific knowledge and expertise in product and production processes. Alternatives can be tried and evaluated. Manufacturing knowledge will be generated in a similar manner to current production, but in much less time. The tools will allow the individual to enhance his/her skills, rather than dictating an action. M&S will be a key to marketing and sales as well as product realization. It will allow the customer to interact with the development team in specifying requirements and the resulting product definition. The customer can use M&S to test the product before the final design is set. M&S will become a broad-based industry with a range of products and services. In addition to application software, geometric models, behavior models, and simulators for processes and equipment will be available in libraries and in the marketplace. These software components will be assembled, required simulations executed, and results will be presented using specialized computer graphics hardware and software. Whats New? All aspects of the enterprise will be modeled and simulated; and all business and technical decisions will be made based on the results of the models and simulations. Modeling and simulation will be the source of new manufacturing knowledge and expertise. M&S information brokers will assist in identifying, locating, and accrediting models and tools.
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A strong effort must be initiated in modeling and simulation of both business and manufacturing/ distribution processes to ensure first-time success. National Center for Advanced Technologies, An Approach to Process Maturity
Modeling and simulation will be a broad-based industry with a range of products and services to support NGM Enterprises. Action Recommendations
VR (virtual reality)...is to the Information Age what the telephone was to the Industrial Age. John L. Peterson, The Road to 2015
1. Increase the number of accessible models for simulation, by encouraging vendors to provide geometric and behavioral models with products and establishing national libraries of validated models of equipment and products. 2. Extend the coverage of commercial software tools to address current weaknesses in the product/process life cycle including tools for embedding customer requirements and market analysis, planning and execution aids, and process optimization into the development process. 3. Support the development of an integrating framework for modeling and simulation that is necessary to both develop and apply improved modeling and simulation tools. Develop standards for this framework, using existing standards where possible. 4. Encourage the establishment of modeling and simulation information services/brokers. 5. Support fundamental advances in representation and modeling needed to integrate multiple levels of simulation (discrete, geometric, physical) to enable virtual product/process/equipment validation.
Adaptive, Responsive Information Systems

Adaptive, responsive information systems are information systems that can be reshaped dynamically into new systems by adding new elements, replacing others, and changing how modules are connected to redirect data flows through the total system. Why is it Important? While rapid evolution of information systems technology is providing companies with a powerful array of business tools, this same evolution is creating new challenges that companies must address to succeed in an increasingly global marketplace where information is fast becoming the only remaining source of sustainable competitive advantage. How can companies quickly integrate their systems with those of partners, suppliers, and customers to form distributed, extended enterprises to compete for a fast-breaking opportunity? How can companies make information infrastructure investments that will not become obsolete in a few months or a year? To meet these challenges, the NGM enterprise must move from a monolithic information system (using a central database in a neutral format) to a ubiquitous service approach in which modules anywhere on the net can be reconfigured in moments to act on data anywhere on the net. The nations industries must move from the current proliferation of proprietary formats and competing standards to a suite of
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The challenge for the future is to...fundamentally change the nature of the system to where we build systems on the fly based on components that already exist across a distributed network... Computer Science & Telecommunications Board, Keeping the U.S. Computer Industry Competitive
uniform data exchange standards that enable modules to be rapidly interconnected to form integrated, robust information systems. Key Concepts Adaptive, responsive information systems are achieved by: Changing the accepted paradigm to information system design and implementation Creating software function modules that can reside anywhere on the net and be readily configured into new systems with standardized data interfaces Establishing uniform standards for the data interfaces Establishing high-speed communication links and supporting standard protocols Developing a framework or infrastructure that allows users with different authorizations to readily and easily create, modify, compose, and enact individual modules and configured systems. Each component in the modular system must be highly specialized to maximize performance, and must rely on shared services to reduce system complexity. Whats New? Paving the way to this change are emerging frameworks and research and development projects such as the National Industrial Information Infrastructure Protocol (NIIIP) project at IBM, the Simulation Assessment Validation Environment (SAVE) project at Lockheed Martin, the Systems Integration Architecture (SIA) project at the Agile Aerospace Manufacturing Research Center, the Systems Integration for Manufacturing Applications (SIMA) project at the National Institute of Standards and Technology, the industry-sponsored Technologies Enabling Agile Manufacturing (TEAM) program, and a variety of industry sector-specific ventures. Object-oriented component software that is frequently reused, and autonomous or responsible agents, will be far more prevalent than today. The World Wide Web will become much more than just a novelty, providing unparalleled, easy access to necessary data and information anywhere in the world, as well as within a single organization. Self-configuring modules that know about each others interfaces will be able to configure a new information system dynamically.
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Integration-Related Imperatives
Extended Enterprise Collaboration

An Extended Enterprise is the seamless integration of a group of companies and suppliers (industrial, educational, investment, and governmental) that collaborates to create and support a timely and cost-effective service or product. Why is it Important? Collaboration is required so that people and processes are dynamically connected and combined effectively and efficiently among the Extended Enterprise partners. Collaboration maximizes the combined competencies of the partners to achieve each partners strategic goals and to provide solutions to meet customers and stakeholder needs. The need for collaborative partnering is driven by the increasing range of competencies needed to produce products and services in the rapidly changing global competitive environment. The cost of maintaining a complete set of vertically integrated competencies is becoming prohibitive for most businesses, making partnering mandatory to successfully address customer needs. Global markets demand local presence in multiple markets. This requires increased partnering of organizations focused on common goals. Extended Enterprise collaboration is a pathway along which individual companies, in association with other companies, academia, and government, can improve the odds of making a successful transition to the NGM environment. The forces on companies now and in the future will demand that most will actively collaborate to survive. Competition will be between Extended Enterprises, not just between companies. Key Concepts Competition will be between value chains (extended enterprises), not between companies. Teaming and Partnering will become the crucial skills at which the NGM company will have to be very proficient and measurable in order to be suitable for inclusion in most Extended Enterprises. Collaborative Extended Enterprises will bring together complementary sets of competencies to address a market opportunity. Successful participation in collaborative Extended Enterprises will require new skills and new business processes and practices. Significant among them will be: Ability to create, sustain, and amicably dissolve relationships with partners having diverse business practices and cultures Willingness to accept increased risk and reward to optimize potential return to all the stakeholders of the Extended Enterprise. These collaborative ventures will take several forms, including a value network, web, or chain in which the partners may be sharing and exchanging other resources in addition to value-added material.
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The biggest problem facing Americans is that we dont know how to come together to solve our problems... World Future Society, Future Survey Annual 1995
This vision depends on making partnering an everyday business practice...alliances must be formed that link independent companies in a support system that will dissolve barriers and inefficiencies AMTEX Program Office, Textile Technology Through the AMTEX Partnership
In an extended enterprise, all individuals and institutions, including the customer, are equal stakeholders and have varying degrees of commitment and risk. Most NGM companies will have to sustain multiple simultaneous cooperative relationships, some of which will compete with each other. New business practices and processes are needed for rapid formation, morphing, and dissolution of Extended Enterprises that allow it to be dynamic without penalizing its partners. The abilities to establish trust quickly, create a vision for the collaboration, and agree upon a common set of goals, metrics of success, and a shared risk/reward agreement are crucial to address market opportunities in a timely manner. Whats New New levels of trust based partnering, beyond current legalistic behavior Ability to rapidly form and dissolve Extended Enterprises Competition between, and optimizing of, value chains rather than individual companies Expanded levels and implications of taking risk. Action Recommendations 1. Cooperatively create a nationally accessible data system consisting of companys evaluated capabilities, facility capacity, technical assets and expertise to allow easy identification of potential enterprise partners, including small suppliers and technology partners. 2. Establish a Collaborative Extended Enterprise Laboratory to pilot and validate tools, approaches, and practices supporting extended enterprise concepts. 3. Develop a system of trust brokers to be intermediaries in the formation of extended enterprises. 4. Establish national accounting standards for valuation of intellectual and intangible assets. 5. Develop and pilot measurement systems that address the value of time and its relationship to other measurements. 6. Cooperatively create and codify legal structures that facilitate extended enterprises. 7. Develop methods for analyses of risks/rewards of the extended enterprise concept to evaluate the viability and financial benefits of collaborative partnering. 8. Develop intellectual property agreement models that any company can use to simplify rather than hinder formation of extended enterprises.
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Enterprise Integration
Enterprise integration connects and combines people, processes, systems, and technologies to assure that the right information is available at the right location, with the right resources, at the right time. It comprises all the activities necessary to ensure that, whether operating as an independent unit or and within extended enterprises, the NGM Company can function as a coordinated whole.
Only those processes at which we can excel will be implemented in house, others will come from the extended enterprise. U.S. Dept. of Defense, 1997 Defense Technology Area Plan
Why Is it Important? NGM enterprises will achieve new levels of responsiveness. This responsiveness will be achieved in teaming relationships and extended enterprises which will greatly increase the demands for information flow and control and will punish integration breakdowns. Such efficiency of integration is only possible in an enterprise where people, information, and business practices are seamlessly tied together. Key Concepts A consistent set of strategies, concepts, and values that guide the ongoing business and product-related processes. These basic operational tenets are consistently implemented throughout the companys workforce, technology, and management practices, and in alignment with the companys specific performance objectives. Well-managed physical, financial, and people assets, with information infrastructures that bind the processes together. Development of the following enabling practices and technologies are required to overcome the barriers and address the drivers and attributes: Fully implemented, seamless, global networks Flexible, responsive organizational structures adapted to 21st Century needs User interfaces and tools that enable seamless knowledge access and exchange Tools to mitigate the negative effects of physical and cultural complexity and enable effective distributed, global operations across cultures Metrics and tools for operational strategies that enable the companies to implement and attain NGM attributes. Whats New? The uniqueness of this imperative is the concise compilation of the challenges of the integrated enterprise as a prerequisite to delivering solutions. Enterprise integration is comprehensive, tying together human resources and technology to execute the business processes of the NGM Company and extended NGM enterprises. Mature existing systems and processes lack the ability and robustness needed to assure seamless interoperability of computing tools, execute manufacturing planning and control functions across the total enterprise, and integrate and control all manufacturing resources and processes. This imperative highlights these necessities and points to solutions.
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Action Recommendations 1. Establish a distributed Clearinghouse for NGM Enablers that documents and validates the maturity and characteristics of each enabler and documents relevant progress. 2. Establish a virtual Center for Teaming in Manufacturing to disseminate knowledge, pilot implementations, and identify education and training skill needs. 3. Establish unified semantics and an integrating framework for global manufacturing information networks. 4. Establish standards and tools to ensure interoperability of networks and design/manufacturing systems. 5. Develop a global regulatory framework for manufacturing networks. 6. Develop intellectual property rights agreements supporting the NGM Company model. 7. Establish a coordinated program to develop and pilot a suite of change identification and change management methods and tools. 8. Develop conceptual models of the manufacturing enterprise which can be used by individual companies to model their businesses. 9. Develop user-friendly, transparent human/machine interfaces.
Information infrastructure is...an engine for economic competitiveness...It will redefine the way that people interact with each other and the world around them. Council on Competitiveness, Vision for a 21st Century Information Infrastructure
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7.0
NGM ACTION PLANS
Starting the Journey to the Next Generation
mplementing the enabling practices, processes, and technologies will require the combined efforts of companies, the community, (federal, state and local government, associations, consortia, academia, etc.) and individuals. No single entity can bring about the required changes. This section describe how each of these stakeholders can begin to take action, and lists key recommendations that cross-cut the different NGM Imperatives and Attributes. The actions discussed below are high-leverage items consolidated from the actions listed within the 10 imperatives, and include other essential, cross-cutting actions not directly addressed by individual imperatives. These are critical steps to be taken to advance the practice of manufacturing. As with the imperatives and their specific action plan recommendations (discussed in the Imperative summaries in Section 6.0), the action recommendations discussed here are highly interdependent and must be addressed as an integrated whole to realize maximum benefit. Implementation must be a collaborative effort of industry, academia, government, and individuals. All must share the effort required to maintain a competitive manufacturing position in the future. What Can Individual Companies Do? Companies will determine those actions that make sense for their market positions and their own strategic plans. They can use the NGM results as a framework for calibrating their own business practices against a recommended set. The attributes and imperatives in this report have been validated through the efforts of more than 500 people over a period of 15 months, and provides a tested framework from which to develop a companys own strategies. Using the NGM framework, manufacturers can and should develop action plans tailored to their company and industry. The general recommendations in this report are intended to be adapted to the needs of each company or enterprise to offer the best balance of near- and long-term benefit consistent with available resources. Figure 7.0-1 suggests an approach an individual company may use to process the results of the NGM Project into an individual action plan. The Imperative papers presented in Volume II define the current and projected maturity level of key enablers for each imperative, including current best practices. Depending on a companys specific operations and strategic goals, they can determine which best practices and recommended actions they can implement immediately. Many of the recommended technologies and practices represent key capabilities desired by a broad cross-section of the nations manufacturing community, and so significant opportunity exists for technology providers and other infrastructure businesses to develop and market next-generation products and services. Companies must enter into the process of developing the new practices. Some can be implemented by companies alone. Others can be started by contacting the organizations involved in the NGM Project,
Dilemmas
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NGM Analysis
NGM Project
Enterprise Attributes, Dilemmas, Imperatives Framework for Action Plans
Evaluate Drivers, Attributes & Imperatives for Business Case Define Metrics for Perfomance Measurement
Individual Company
Develop Company-Specific Action Plan
Implement Action Plan & Measure Performance
Figure 7.0-1. Individual companies can apply the NGM methodology to develop action plans specific to their industry sectors and competitive positions. and by becoming engaged in ongoing development projects. Small and medium-sized companies can likewise apply the NGM framework to enhance their own strategic planning and R&D efforts, and should also participate in the development projects. What Can Industry Associations, Consortia, and National Laboratories and Facilities Do? Take the lead to establish collaborative efforts to develop, pilot, and validate key cross-cutting new practices and technologies Continue to act as neutral technology brokers for development of standards and validation of manufacturing practices. Provide facilities and leadership for NGM technology demonstrations and initiatives to address large, complex technological issues (grand challenges) requiring integration of multiple disciplines and organizations. What Can Academia Do? The NGM attributes and imperatives can be used to define a far more rational set of research directions for the academic community than presently exists. Topics in technology, human resources, and business processes can all be derived from these imperatives, and can in turn lead to an integrated Knowledge Supply Chain as suggested in one imperative. The attributes and imperatives will, of course, need to be continually tested and updated to remain in tune with rapidly evolving business, social, and technological trends. Universities can also serve as a neutral ground for sharing ideas and research among companies, associations, and government agencies.
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In addition, the concepts and framework of NGM can be part of manufacturing curricula for both engineering and management students, to acquaint them firsthand with the problems faced by forwardlooking manufacturing companies, and to help equip them with some initial understanding of the solution paths. In this sense, NGM material in the classroom can help shape important career decisions of our future manufacturing leaders. What Can Local, State, and Federal Government Do? As companies have increasing ability to source products and services nationally or globally, the responsibility for the economic success of a region is shifted more to the community of that region. From the national to the local level, policies and practices should support development of the resources that make manufacturing companies successful, which includes meeting the needs of investors, customers, and employees. This will first require establishing a continuing process to understand and communicate the changes taking place, and their implications. Government agencies can align their R&D strategies to support the efforts of industry and academia to translate the new concepts of NGM to reality. They can also examine the legal and regulatory barriers to the next-generation Enterprise vision. State and local governments are vital to working with industry to foster the changes needed in education to facilitate an employable, capable workforce. As with academia, government agencies working in the manufacturing area will need to continually review and adjust NGM-related implementation efforts in response to evolving trends. Beyond this, government, industry associations and consortia, and academia must cooperate in sponsoring development of standards that drive key technologies, and in developing and implementing pump priming programs for technologies where the payoff is long-term or uncertain, but which are critical to U.S. manufacturing competitiveness. What Can Individuals Do? Individuals, together with employers, must be proactive in recognizing and planning for skill shifts that result from the increased pace of change. Continuous education is a mutual responsibility of both the individual and the company. In situations where the company is not providing this education, the individual must take further action to develop skills for the future. Cross-Cutting Action Recommendations These actions are the high-leverage items reflecting integration of key actions associated with each imperative as detailed in Section 6.0. These cross-cutting actions require the cooperative efforts of government, academia, and industry for full implementation, which is essential to accelerate evolution of U.S. manufacturing to the next generation.
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1. Establish an NGM Extended Enterprise Demonstration Site to develop and pilot collaborative business and legal processes, and serve as a national clearinghouse for company capabilities. An NGM Extended Enterprise Demonstration site needs to be established to model, demonstrate, pilot, and implement the various aspects of operating NGM extended enterprises to ensure rapid implementation of high-value concepts in U.S. companies. This site needs to incorporate a national clearinghouse for company capabilities and resources already in place throughout the economy in a precompetitive format. Such real-time, right-time information sharing will help companies anticipate and resolve the issues posed as they move toward the NGM vision. Extended Enterprise Collaboration is a mechanism individual companies can use to improve the odds of making a successful transition to the 21st Century competitive environment. Current and future forces on companies demand that most must actively collaborate to survive as the basis of competition shifts from individual companies acting alone to extended enterprises leveraging their collective strengths. Major demonstrations to be conducted at this site include: Demonstrate Next-Generation Manufacturing through creation of pilot enterprises. Many elements of NGM require coordinated and integrated demonstration and validation in a model enterprise to prove their value, validate their functionality, and pave the way for broad implementation. However, other elements require coordinated and integrated demonstration and validation in a model enterprise to prove their value, validate their functionality, and pave the way for broad implementation. Such a model enterprise would function in real production operation and would incorporate NGM concepts including modular and reconfigurable physical plants, virtual manufacturing, knowledge-based learning systems, integrated information systems, and enterprise-wide integrated product realization. Demonstrate an operating integrated NGM supply chain. NGM encompasses a vision of a totally integrated enterprise where core competencies, technology, workforce capability and availability, and product are provided through a partnership without the boundaries of corporate and physical structure. A comprehensive set of leading-edge tools is emerging that allows a company to assess their own and their suppliers core competencies as members of an agile supply web and to implement and control the extended enterprise. Integrated demonstration and further development of these tools is necessary to establish criteria for evaluating supply-chain effectiveness and building the relationships necessary for future NGM companies to thrive.
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Establish a national manufacturing technology network to cooperatively develop and accelerate deployment of solutions to major industrial problems. We must systematically define and prioritize needs to support an investment strategy that coordinates activities and missions of various R&D organizations. We must also streamline the process by which ideas become solutions. Using the context of the extended enterprise, solutions will be developed and piloted with the valuable resources of the existing national laboratory and manufacturing center infrastructure. These institutions will work in a collaborative environment to accelerate the transition from science-based research, to applied research, to targeted development, to applied development, to prototype solutions, to pilot deployment, and to full implementation. Establish a forum for all the invested stakeholders to cooperatively investigate and resolve issues associated with the next-generation workforce. A partnership of vested parties must come together to resolve the challenges presented by increasingly problematic workforce issues. Among the concepts to be developed and demonstrated are skills certification, portable pension and benefits, training methodologies for sustained employability, and motivational strategies for lifelong learning. Develop and practice the concepts of knowledge supply chains. Knowledge can be treated as a transferable commodity, and enterprises should apply the principles of supply-chain management to the acquisition of both explicit, codified knowledge and knowledge/skills embedded in people. The feasibility, best practices, and benefits of current knowledge supply chains must be publicized, expanded, and committed to practice. 2. Develop NGM models and assessment capability. A company will have to extend the NGM framework throughout its operational and tactical planning and related implementation activities. To support this process, the NGM Project recommends developing an integrated reference set of NGM multi-level models for global drivers, business, and manufacturing. These would be based on adaptation of currently accepted models and would facilitate: Incorporation of research and case-study findings from both within and outside of manufacturing, including leading-edge metrics. Mutual understanding among companies considering collaboration in extended enterprises. Blending of a company's NGM migration planning into existing company planning in a manner that minimizes disruption to the ongoing business. Lower-cost, more rapid NGM training with a common base. This would make it transportable, thereby supporting the move from lifetime employment to lifetime employability. Compatible structuring of NGM knowledge bases.
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The Project also recommends development of an NGM assessment capability consistent with the integrated set of NGM models above. This would let a company: Assess its NGM capability and identify gaps for prioritized improvement Judge other companies' NGM capability, both for competitive assessments and for evaluating potential extended enterprise partners. 3. Develop and deploy a seamless, integrated, interoperable manufacturing environment using 100% commercial solutions, providing a common foundation for NGM factories. The grand challenge of total information integration is now being addressed through many efforts with loose or nonexistent coordination. An industry-led unifying effort is required. The effort will build on user-defined needs, bring together technology suppliers for synergistic development, and move to commercially supplied and supported tools and technologies. This NGM implementation activity will: Provide solutions to the interoperability problems of heterogeneous design, engineering, and manufacturing systems. Develop product realization models and Internet-based integration managers that apply those models for extended enterprise collaboration and control. Provide enterprise-level, knowledge-based decision support systems that enhance the independent decision-making ability of knowledge workers. Develop and deploy plug-and-play manufacturing subsystems with software-driven, customer-reprogrammable customization capability for assured integration with legacy systems. Support maturation of STEP and enhancement of product data representation systems with callable levels of detail and complete application programming interface specifications. Replace the existing computer-aided design mindset with integrated design and manufacturing systems that enable maturation of emerging concepts such as science-based manufacturing, mathbased manufacturing, customer-order-driven designs and products, etc. 4. Develop technology roadmaps for manufacturing and apply those roadmaps in moving to NGM solutions. The NGM deliverables describe the future enterprise, and the needs assessment from the NGM Roadmapping study provides a baseline of current planning. It is imperative that a migration strategy is established to lead companies, collectively and individually, to the NGM environment. By combining the NGM findings with the roadmapping results, and by developing an enabling technology roadmap, the top-priority needs of industry and government can be defined, a gap analysis performed, and solution plans established. The
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results of the analysis will provide a foundation for creation of a data repository where activities and solutions can be mapped to the need areas. Industry will use the repository to access solutions, monitor progress in critical areas of interest, and establish planning baselines for their own activities. Specific actions include: Create NGM technology roadmaps for the key need areas. These areas can be identified through analysis of both the NGM findings and the synopsis of existing roadmaps and strategic plans. Develop an on-line data repository in which activities are mapped to mileposts defined by the technology roadmaps. Establish a solutions clearinghouse to ensure companies have access to the best knowledge and solutions to their specific needs. Provide links to companies and individual contacts to maintain a pipeline of current information about emerging solutions. Coordinate the activities of this action through the Extended Enterprise Demonstration Site developed in action recommendation #1. 5. Develop systematic processes for knowledge capture and knowledge-based manufacturing. As the pace of knowledge and technology application accelerates, and as industries downsize, valuable corporate knowledge is being lost. More importantly, the application of information in knowledge-based life-cycle manufacturing systems is increasingly vital to leading-edge companies. Development and demonstration of a systematic process for knowledge capture spanning the entire product realization process, from customer interface through design, production, delivery, support, and disposal or retirement is imperative, and has particular value in establishment and assurance of workforce capability. This action will: Deliver a framework for knowledge capture that reduces the cost and complexity of developing knowledge systems Provide a repository of process knowledge that can be accessed and incorporated into specific systems Proliferate the use of knowledge tools in manufacturing process applications. 6. Establish and implement methodologies to infuse NGM concepts through all levels of corporations and enterprises. To help companies fully benefit from the strategic framework of NGM and to continue to develop this framework, a program of working sessions with individual companies to review and expand the NGM results is needed. In these sessions, companies will form their own strategic plans, using NGM to derive their own set of Drivers, Attributes, Dilemmas, and Imperatives, and they will develop their own plans for action. In the process of plan development and execution, the concepts of NGM will be infused through every organization and level of the enterprise.
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This recommendation is a key way that NGM can be implemented and developed within individual companies, and ensures industry will have a direct voice in updating and deepening the collective national view of future manufacturing needs, goals, and objectives. Operationally, it would be carried out by small teams familiar with the thoughts of NGM, meeting with company staff and jointly tailoring the framework of drivers, dilemmas, and attributes to the particular company, and assisting in determining recommended actions. 7. Advance the understanding of innovation and change management to provide a basis for competitive advantage through step function improvements of productivity and responsiveness. Innovation is a process that can and must be taught, learned, applied, and measured. The understanding of innovation must be developed so that the fundamentals can be taught in the same way as productivity improvement. Approaching innovation and change as processes is a radical shift from ad-hoc applications of it to a system which depends on innovation. Implementation of codified, proven innovation management techniques will be a key competitive discriminator of the future for companies in developed countries. Step function increases in both productivity and responsiveness to stakeholder needs can be achieved. Managed, innovative change must occur in much more than product and process design. It must also be applied to human resource policies, financial measurements, partnering, reward and recognition systems, and all business practices. Extensive and continuous innovation is dependent on the creativity and skills of the total workforce. This requires creating an environment where innovation can be nurtured and facilitated, through trusting and motivating the entire workforce. A better understanding of the value of long-term effects of good innovation policy should be developed and companies processes should be restructured to facilitate a strategic shift to support innovation through an enlightened change management process. 8. Establish a government partnership with industry and academia for a supportive manufacturing infrastructure. NGM is industry-led, industry-driven, and addresses the enterprise as a global business entity. This does not, however, negate the importance and responsibility of the federal government as a partner in NGM implementation. The success of NGM companies is founded on an assumption of good government and supportive government investment. Further evaluation is needed to support this partnership in new and innovative ways that might include policy and regulation changes, sharing/mitigation of risks, and sharing in rewards. This will be accomplished in an environment of industry, government, and academic cooperation to protect the collective interests of a strong national defense, a high standard of living for our citizens, and a stable and strong economy.
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9. Enable and promote pervasive use of modeling and simulation. Applied modeling and simulation (M&S) has revolutionary potential in manufacturing affordability, quality, and responsiveness, but the impact is limited by difficulties in creating and using the results, the lack and cost of creating meaningful data, and low confidence in the accuracy of the results. There are a number of actions required to realize the dramatic impact that such systems can bring. These include: Develop standards and methodologies for verification, validation, and accreditation of M&S tools and models. Apply these methods to existing simulation codes to ensure results. Establish and share verified, validated, accredited models, including geometric models, behavioral models, process models, cost and performance models, process data, etc. Establish a repository of validated models for application. Support development of the integrating M&S framework needed to develop and apply improved M&S tools. Develop standards for the framework, using existing standards where possible. Apply emerging techniques to development and application of M&S tools. Incorporate knowledge-based systems in user interfaces to assist in training, implementation, and operation, and in interpretation of results. Support the fundamental advances in representation and modeling needed to integrate the multiple levels of simulation (discrete, geometric, physical) enabling virtual production. 10. Develop intelligent processes and flexible manufacturing systems. Tremendous productivity and time response advantage is realized by streamlining process development, ensuring quality in-process, and integrating these into a responsive manufacturing system. Flexibility in responding to customers and the broad range of manufacturing challenges comes with the provision of the flexible, reconfigurable factory. Achieving this goal requires establishing and refining the methodology of intelligent processing to reduce the difficulty of creating incontrol systems. This methodology includes: Characterization of intelligent processes Analysis and selection of critical process parameters Intelligent sensing, monitoring, and control of critical parameters Development of control algorithms and implementation of intelligent control strategies Integration of intelligent processes with advanced manufacturing systems concepts Development of advanced functionality, open-architecture controllers that support this intelligent manufacturing environment.
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8.0
NEXT STEPS
A Call to Action
here is no doubt that NGM enterprises will develop. The question is when, where, and among whom? The answer will be the result of deliberate decisions and commitment to do so. The mission of the NGM Project is to define a vision and a framework for action that companies can use to ensure competitiveness into the next century. This effort does not end with the delivery of this report; rather, it launches the process of dialogue and response that must occur to realize the NGM vision. Companies large and small, industry associations, national laboratories, universities, government agencies, workers, and other stakeholders must now come together to begin the implementation processes. The organizations that have participated in the NGM Project over the past year-and-a-half will make presentations at conferences and workshops over the coming months to communicate the NGM visions, discuss the actions recommended for implementation, and promote the alignment of goals, plans, and objectives essential to focusing the resources of the nation on the path to success. We encourage all members of the nations manufacturing constituency to get involved in this process to align their resources to develop, validate, and deploy the enabling technologies, processes, and practices essential to the NGM Enterprise; to resolve the cultural and legalistic barriers to next-generation business processes; to develop and apply new strategies for coordination of manufacturing research; and to establish a network of national assets that continuously addresses issues on the path to the future state.
This report is not for managers we have enough of them. This report is for leaders, who have the vision and ability to transform its recommendations into actions that will move American manufacturing into the next century. Dwight Carlson, CEO, Perceptron, Inc.
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~Appendices~
A-1
APPENDIX 1 Summary of Executive Advisory Group Findings and Executive Interviews Introduction One of the NGM Projects primary strengths is the wide span of industry sectors and management levels addressed in the future vision and resulting framework for action the report presents. To ensure that the project addressed the full spectrum of strategic issues facing American industry, the 13 participating associations and consortia nominated more than 50 executives to an Executive Advisory Group (EAG), chaired by Tom Murrin, Dean of the College of Business Administration, Duquesne University. These individuals, listed in Table A-1 on the next page, provided a top down view for the Project and suggested actions they would take to make their companies more competitive in the next century. NGM Project team members interviewed each EAG member one-on-one or in small groups, occasionally accompanied by staff. After a brief presentation of the NGM mission and methodology, the executives were engaged in discussion of the market drivers impacting their industry, the attributes their company should attain to succeed in that environment, and issues to address as they move their companies into the next century. These sessions typically lasted 1 to 3 hours and provided a rich source of information that, when coupled with the projects roadmapping and thrust area team work, provided a broad, picture of future requirements and actions needed to put companies on a path to that future. Many of these same executives also provided valuable review and critique of the NGM report as it evolved. The NGM Project team is indebted to these executives, whose volunteer time and effort has enriched the content of this work. The executives were also asked what would it take to have the NGM Project report reside on the corner of their desk and not gather dust on a shelf. Their answers varied, of course, but generally agreed that the report should have: A short overview that can be quickly reviewed A menu of action recommendations that can be tailored to an individual company Some examples of how other companies are moving in this direction. The feedback from our final reviews indicates that the report has met their criteria. Following is a cross-section of key comments, issues, and perspectives provided by the EAG members through the interviews and report development and review process. Recurring Themes The following list represents a distillation of comments that arose repeatedly during the interviews. Globalization is affecting all businesses, even small suppliers, since their customers are going global. The diversity barrier as we go global is real. Trust, teaming, and working together is a critical issue. New forms of workplace are here, such as telecommuting. Understanding of software is a necessary manufacturing skill. Manufacturing must be viewed as a complete service. There is a new level of understanding of customers and customers customers problems. Skills become obsolete at 20% per year. Continual re-skilling is needed. Stakeholders include customers, employees, shareholders, suppliers, and communities. Reduced speed of equipment setup gives the ability to acquire equipment after an order is placed, giving real equipment flexibility. Laws and government policy are important considerations.
A-2
Table A-1. Executive Advisory Group Participants

Individual Beck, Joel Bescher, Robert F. Bowen, Kent Buckland, Art Burtner, Carl Carlisle, Brian Carlson, Dwight Commassar, Dorothy DArbeloff, Alex Davis, Don Donaghy, James Erdekian, Vah Farnum, Stanley Fradin, David Fuchs, David Gallello, Dominic J. Garland, Terry Glazer, Lou Hawkinson, Lowell B. Holleman, Edith Hsu, Jamie Hyduk, S.J. Bud Kelley, Bernard J. Kennedy, William Kirby, Cal Lake, Charles Lehmann, David Lester, Richard Lilly, Dick Lyijynen, Dave Meadows, Don Melia, Kevin Melissaratos, Aris Mittelstadt, Eric Murphy, Richard Nagey, Steve Nayak, Ranganath Oldfield, Joseph R. Potuondo, Pepe Puffer, Bob Rock, Pete Runkle, Donald Salzman, Hal Scott, David Shumway, Herb Stander, Bob Swanson, Gary L. Swindle, Jack Terrell, Dorothy Thurow, Lester Tobin, John Wheelwright, Steve Williams, Lynn Wright, Bruce Company EMC Corporation Pratt & Whitney Harvard Business School CP Claire Corp. Textron Adept Technology, Inc. Perceptron GE Aircraft Engines Teradyne The Stanley Works Sheldahl Bay Networks SK Williams Co. EMD Associates, Inc. Allen-Bradley Company Autodesk EMC Corporation Michigan Futures Gensym Corporation AFL-CIO (Formerly, currently NIST) General Motors Advanced Technology, EDS Merck & Co., Inc The Sequoyah Group, LLC Hughes Electronic Co. FEI Company Solar Turbines MIT Industrial Performance Center Lilly Software Chrysler Corp. Lockheed Martin Manufacturers Services Ltd. Westinghouse Electric Corp. FANUC Robotics, N.A. Wheelabrator Chrysler Corp. Arthur D. Little Polaroid Corp. A.D. Little (formerly) Avid Technologies Chrysler Corp. General Motors Jobs for the Future Equipto Digital Equipment Corp. Prince Corporation Design & Manufacturing Corp. Texas Instruments Sun Express MIT Sloan School Siemens Corp. Harvard Business School United Steel Workers Union Nashua Position Vice President, Manufacturing Vice President Professor Chief Executive Officer Vice President Human Resources Chief Executive Officer President & Chief Executive Officer General Manager Chief Executive Officer Retired Chief Executive Officer President & Chief Executive Officer Vice President Chief Executive Officer President Vice President for Corporate Development Vice President, Mechanical Market Group Human Resources President Chairman & Chief Executive Officer Consultant, Industrial Union Department Executive Director, Power Train & Strategic Futures Vice President President, Manufacturing Division President, Chief Executive Officer Corporate Vice President Vice President, Manufacturing Vice President & General Manager Faculty Chairman & Chief Executive Officer Manager, Manufacturing Planning Vice President President Vice President of Science, Technology & Quality Chief Executive Officer Human Resources Manager, Executive Training & Manufacturing Consultant Executive Vice President, Photographic Imaging Consultant Vice President, Operations Technology Development Executive Vice President & General Manager Director of Research Vice President Manufacturing Vice President Vice President, Manufacturing President & General Manager Vice President, Manufacturing President Professor of Management Director, Technology Training Faculty President (retired) Vice President, Human Resources
A-3
Global presence flexibility can be achieved by a virtual organization infrastructure; current technology allows this. There are dilemmas facing manufacturers that are real sources of opportunity. The dilemma of controlling processes when we outsource needs solving. New levels of partnering with customers requires selection of customers. Customer power can get excessive. Manufacturers have no way to bargain with retailers. Cost is a real driver. The following comments are summaries of comments we took away from the interview process. They give a flavor of the discussion, and are presented grouped as follows: Dilemmas of the Next Generation Forces Driving Business Change Globalization Workforce/Workplace Issues NGM Project Usefulness to Industry Other Comments Other Topics NGM Needs to Address. Dilemmas of the Next Generation: We need to see the dilemmas as a creative tensions, solved by having multiple winners, rather than seeing them as adversarial relationships with one party winning at anothers expense. This is true within companies and across national boundaries. From a number of interviews, dilemmas in addition to those taken into the report were highlighted: How to have quality and short cycle times. How to satisfy all the stakeholders when all stakeholders needs cannot be satisfied simultaneously at any specific instant. How to use the same line for large volumes and custom small lots. How to invest in training and lifetime employment and have optimum turnover. How to hire a key person whose job will not last. How to have security without long-term employment. How to have a flexible work environment and customer responsiveness with job security. How to have corporate identity with truly global operations (units grow apart). How to have a common culture with globally dispersed operations. How to have both trust and speed when trust must be earned. How to have a true partnership and individual company identity. How to codify change and have responsive cultures without quashing innovation. Forces Driving Business Change The rapid rise in standard of living in developing regions provides opportunities for companies, but requires changes in the way they think about products, and about job types and locations. Increasing government regulation. Perhaps the major economic driver is government creating an environment which encourages a rising standard of living. Instead of being a policeman, government should be a partner Instead of being a judge, government should be a contributor
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Instead of taxing initiative and success, government should tax the results of the activity rather than taxing the means of production. Cost of doing business in a compliance and regulatory world. The biggest concern is that this category of expense is not controllable. Growth in developing countries, as both market opportunities and as competitive threat. Demand to do more for less. Excellence without low cost is not enough. Decreasing costs in increasingly competitive environment. Good is not good enough. The Value Chain is continuing to expand beyond a single manufacturing company. Capital costs U.S. companies five times what it costs Japanese companies; there is no way to overcome this difference. Globalization We see things through a Western perspective. Things like a free press and due diligence are not extant in some areas. Migration of people, from developing regions (e.g. from Africa to Europe) or from rural to urban areas (e.g., China) will continue unless the issue of converging standards of living is explicitly addressed. Developing countries push for the latest technology, wanting to jump up the technology curve to be producing the same types of products as developed regions, and producing for export. The desire is not just for jobs in the emerging regions, but for jobs and industry at the leading edge. Technology advantages of developed regions are short lived. Operations in developing regions can be a high risk, high-reward game. One auto manufacturer will have 1000 engineers working for 2 years in China to design a new product before it begins to produce there. Environmental issues are not just a matter of regulations, but also an issue what is the right thing to do when there are no regulations, and competitors are not concerned for the environment e.g., does a U.S.based car manufacturer building cars for China meet U.S. emissions standards? The shift of economic power to Asia will continue, and, as leveling occurs, the U.S. will find itself in a position of no longer dictating economic direction. Instead the U.S. will join the community of nations as responders to the global marketplace. Small companies are becoming global to serve global customers. The OEMs want the suppliers near them. Suppliers must follow OEMs overseas. One equipment supplier gave an example of needing to be local. To sell in Japan, they have to produce in Japan. If they do development in Japan they can make more than one sale there of each type of equipment. If they develop here, the Japanese purchase one unit and develop the rest on their own. Local product is needed for many companies, yet some products can be global. Performance is more important than being a global supplier, but with equal performance, local presence can differentiate. Dispersed R&D: Some R&D can be dispersed. Macro products (assembly of final product tailored to a specific market) must be local. Micro products (components) can be global. R can be centralized, but D needs to be dispersed.
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Workforce/Workplace Issues The most important concern in the area of responsiveness is human responsiveness. A companys biggest challenge is how to develop a highly motivated, challenged workforce that feels respected. Individuals Development There is an additional from-to statement needed: Entitlement Culture => Performance-Based Culture. Some employees have retired on the job without telling us. Some companies are allowing people to be placed in dead-end jobs without telling them. This culture forces employers to have agreed-upon goals for all employees. However, anxiety results when companies remove the tradition of seniority as the basis of security. One company explicitly helped employees with career development and job searches with written goals for employees and by helping some to find employment outside the company. Employees are highly supportive of these efforts. A difficulty with written goals is an employees fear of being set up for dismissal if the goals are not reached. Companies are asking more from workers, from the education system, and society, yet companies need to see their responsibility for this; they dont get it for free. NGM appears to put too much responsibility on the employees alone. Companies need to assist employee development. In the future there will still be companies providing job security. Not all the shift to security based on skills will happen at the same rate in all industries. We need to understand this dynamic and have strategies to work within it. In discussions of the needs of the worker, there is a strong distinction between the needs of the hourly worker and the those of upper management. The notion of security for the two groups is different and we need to be more precise in clarifying the distinction and acting on it. There is a need for a people roadmap in addition to the technology roadmaps. Empowerment Power sharing increases power. This is true empowerment. Companies can not have a pro-forma type, where management shares information, but not the information that drives results. Discretionary Effort There is a strong relationship between loyalty and discretionary effort. There seem to be two forms of discretionary effort: working harder by not wasting time, energy and effort, and working smarter being more innovative and creative, making improvements as well as doing the task. An example was given of foreign labor which gets higher productivity than their U.S. counterparts with the same products and the same technology by simply working harder. How can U.S. companies and communities create an environment that will help increase discretionary effort in both working harder and smarter? Discretionary effort taps into the difference between the minimum effort required by the job description and the maximum effort that a motivated, interested employee can do. By motivating employees so they feel ownership of their tasks and feel they make valued contributions to the company, employers can see effort levels rise 30-40%. There is a trend from just doing your job to using discretionary effort to do it as well as you can. Training Skills obsolescence is estimated at 20% per year. Lack of training at present is only penalized in lumps (downsizing). The impact should be spread over the times when it is incurred, to motivate increased training. Education, training, and the human resource issues regarding shift of job skills caused by globalization is a key area. This area needs to continue to be worked.
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A major obstacle to pursuing long-term benefits of training is inability to quantify the returns. People intellectually believe in the benefits, but without quantifying them, cannot get others to act. This becomes a major area of research for the academic community. While the development of a U.S. apprentice program was universally advocated by those present at one Human Resource managers session, the limiting problem is the fear that not enough companies will participate, which will put an unfair burden on those that do. This results in a lot of individual local action, but none of this approaches a critical mass which can cause systemic change. The Knowledge Supply Chain concept appears reasonable, but the current industrial and academic reward and recognition system actually discourages working with knowledge suppliers. It will take the same work and level of effort that it takes in the material supply chain, to work with knowledge suppliers. There is a need for demonstration of bottom-line results before this investment will be made. Employee Ownership Employee involvement is fostered by: Creating a situation with financial ties all employees are eligible for quarterly bonuses. Ability to make changes, to have impact. Creating a challenging environment. Making the stakeholders visible. Customers are brought to the factory floor to talk to operators. Board meetings are held at plant sites. Current situations of downsizing have employee motivation based on fear. In the long term, only equity can provide the motivation individuals need. Ownership may increase a workers interest, but will not change behavior. Increased responsibility is needed. With current systems, if the company does well, everyone (investors, managers, customers) benefits except the employees. Employees have the longest-term view of any of the stakeholders. TQM The employees make presentations of successes in problem-solving. Six years ago they were hiding problems. Now they make presentations about them, even in front of suppliers. This is a huge change in mindset. New Social Contracts Is the new social contract or workforce flexibility the kind of world we want? Do we want companies able to hire and let go of employees more easily? Should we advocate changes to help this? We may get what we ask for. These can become a self-fulfilling prophecy, but it may not be the only way, nor the best way. Are these inevitable, or are we bringing them on ourselves? The notion of a workforce laboratory based on industry experiments makes sense. Industry seems willing to participate, but not ready to lead it. A laboratory will provide a place to where they can participate, where they can work jointly, without a huge investment by any one company. NGM Project Usefulness to Industry One of the most striking things about the report is the emphasis on soft issues. The NGM project grew out of a technology-focused initiative, the Manufacturing Infrastructure Subcommittee, but the report has more emphasis on people issues and business practices than on technology. NGM is not indicating that technology is no longer important, but rather that the other issues are becoming discriminators. Fleshing out the drivers of change to help prepare his company for a market in advance of it happening would be of great value. NGM presents a level of strategic thinking above where managers are operating on a day-to-day basis.
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NGM will help if it helps strategic planning by showing what other people are thinking e.g., about how small businesses respond to global pressures. The help of NGM to industry may be in defining the real issues. NGM can help define an environment out in time which will provide understanding and predict behaviors of customers and suppliers. Companies can use this understanding to develop their own plans for achievement. In general there was conceptual agreement with the ideas presented. The proposed strategies sound good, but Industry needs more practical proof of new concepts before they will fully engage in developing them. To succeed, any enterprise needs technical competence, business competence, and leadership. NGM action plans should help show how to get these three key ingredients. To have lasting impact, understanding of all these issues must get down into the K-12 schools. Regardless of our action plan recommendations, government needs to be included in our rollout. There still is not enough understanding in government of the importance of manufacturing, and for NGM to be successful it needs to have a groundswell of top executives interacting with Congress. The rollout is equal in importance to the substance of the report. In a presentation to a mixed audience of industry, government and academia, the reaction from corporate executives is the most positive. It is seen as a strategic-level document, hitting the issues of concern to companies. This is confirmation that an industry emphasis and perspective is present in the report. Metrics provide a link from strategic issues to day to day activities. Metrics should be a key part of the report. There is a need for an operations guidebook to help companies make the transition to Next-Generation Manufacturing. What is the shelf life of NGM? The action plans have the shortest horizon, while the attributes, drivers, and dilemmas will be concerns for a much longer period. There is a need to update the report. Whose desk corner will the NGM report sit on? It will have to be implemented at the people, process and technology level, and cannot be successful without being implemented in all the elements of a company. The NGM study has a U.S. bias, but the issues are bigger than the U.S. This study must compare U.S. strategies to those of Japan and Europe. Some specific reactions to early outputs of the project: I want to take this and show this to my people. NGM is only applicable to large companies. I like it because it is comprehensive. You have done a marvelous job getting this organized. NGM helps me to see what challenges manufacturers are going to face. NGM does not have enough union input. NGM only addresses education at the university level it doesnt address the entire system. Other Comments Multiple Stakeholders and Shifting Responsibilities Companies will locate wherever the technology drives them. The maintenance of high-tech companies in this country is the result of having technology users here. The community and government must be concerned about having the environment to attract business. A Michigan research group is addressing the same issues as NGM. They emphasize the community and the individuals responsibility, and bring in the role of the family in supporting the education needed for a future workforce. They emphasize that industry acting alone is not enough for future success.
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The new roles of the individual, the community, and the corporation were reaffirmed. Examples of help from the community were given: reduced utility rates, and One-Stop-Career-Centers that help individuals and companies deal with job transitions. Companies can help individuals move toward greater responsibility for their own development by tying salary increases and promotion to completion of academic training. There is a need to better understand what are the roles of all the members of the extended enterprise. D&I versus R&D One company has no line item for R&D. Their competency is Development and Integration. They are not developing products based on their own research, but rather based on suppliers developments. Without supplying their own technology, their competency and their advantage is putting together solutions that really meet needs. They do not articulate this, and so could be in danger of losing this skill. Integrity versus Loyalty Integrity, a sort of honest declaration of expectations and living up to commitments, is contrasted with loyalty. Is the new paradigm integrity, living up to commitments, telling others your intentions, but not sticking with them? Is this the best strategy in the faster-paced market? Is loyalty a thing of the past? Stakeholder Needs One company looks at four stakeholders in a decision to acquire a company: Customers, Employees (their skills), Shareholders, and Suppliers To enhance their flexibility, one company consciously chooses suppliers and customers who are global. A deliberate strategy for acquisitions and selecting customers assures there are no angry stakeholders. Only those customers willing to work in a true partnership relationship are selected. The discussion of needs understanding, from What they say, > ask, >want, >need was felt to be on target. The skill of understanding needs is a research topic they feel is worthwhile to pursue One contract manufacturing company sees itself as an actual part of their customers business. Their aim is to understand and satisfy their customers customers problems. A VP-level representative is physically located with the customer as part of the customers manufacturing VPs staff Some companies are sharing savings 50/50 with suppliers. They never want to be more than 15% of a subcontractors revenue base since this means the supplier always has a larger customer they can learn from. Their engineers learn from their suppliers. Information Technology and New Work Forms Even easily available information technology enables a new workplace organization. Each of the first three tiers of corporate employees gets the package: a laptop, beeper, and cellular phone. There are no secretaries. Virtual meeting are held weekly. Work is a place, not a location. The central office is as much to make traditionalists comfortable as it is for work. However, once a month there is a week of face-to-face staff gathering. Normally the staff is scattered around the globe. The management team not only reflects who we are, but where we are. Property, Plant, and Equipment Flexibility One company achieves 80% utilization of a line in 60 days. They get full-scale production quality in 3 to 6 weeks. They lease equipment, which provides flexibility to rapidly acquire new equipment. Japanese take standards for granted, and clean sheet design incorporates many standards. Americans take clean sheet design as an opportunity to challenge standards. Designing new products to use more than 60-70% of the capital required for a previous product gives flexible and reusable processes and equipment.
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Intellectual Property Historically there has been an understanding of sharing of intellectual property for productivity or cost reduction reasons. Sharing occurred because one partner could perform a task cheaper or better. Now there is a need to share intellectual property for creativity and for innovation, to build new knowledge greater than that which is shared. With this sharing, there is the risk that one partner can take the combined knowledge and innovate faster than the other. Sharing of intellectual property is an issue that remains largely polarized, where institutions focus more on what can be lost than on what can be gained. Innovation Innovation is a critical area, and needs further emphasis. Cycles of learning, or knowledge turns, is a possible approach to working on innovation. The importance of innovation is highlighted, but NGM needs to make clear what will make it happen. Foreign governments invest in R&D, and there is a policy question of whether the U.S. should more actively do so. Innovation in these discussions seems to be equated to technological advances. Step-function (innovation) is the most difficult. This is an area of great opportunity. Culture of Innovation: You can teach a technical skill, but you hire an attitude and values, and a receptivity to change. One company felt they have experience with innovation. For example, They have a Stolen Base Award for taking someone elses idea and implementing it. They have an average age of 30, and emphasize a culture of innovation. Modeling and Simulation Modeling and simulation is a key issue, one which can drive the rate of implementation of new products and technology. New regulatory acceptance of modeling will be needed to make its use more widespread. Use of modeling to speed technology implementation can foster innovation. Increased Power of Distribution In commodity items, large distributors and retailers have huge leverage over manufacturers, and can significantly squeeze the manufacturers. How do manufacturers stand up to such force? For one company, in the past no distributor was more than 3% of their sales. Now 1 distributor is 20% of their sales, and a few large distributors make up 40% of their sales. Organization Structure By using networks, a service company can have local calling numbers in each country, yet route the calls to a single U.S. location and have the calls answered in the language of the origin of the call. This is being virtual with a face. Thinking globally with operation locally, yet getting economies of scale from a single central operation. They can easily enter a new geographic market, without having to set up new infrastructure. One company had a strong culture that helped them define and meet customer needs. In a virtual enterprise, what supplies this culture? Service Manufacturing managers are becoming responsible for more and more of the process. Purchasing design, inventory and distribution are now all concerns of the manufacturing manager. What prevents product servicing from being the next step? If product service is a concern, end of life service, and recycling are more of a concern.
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Other Topics NGM Needs to Address Producing seamless floor data Accurate accounting systems Methods for control as companies become self-directed and geographically dispersed Flexible work environments Dealing with geographically dispersed sources of supply with different social values Product life-cycle compression Software competency in our manufacturing organizations Cost accounting systems to manage future costs and profits, not historical costs and profits Velocity on the physical plant, which is felt to be the most important issue for the future How a small company stays abreast of the changing technological landscape The process of change, which is the basis for all the other processes. It is the most useful, but the most difficult to work on. Leadership is an essential part of change.
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APPENDIX 2 Digest of U.S. Industry Roadmaps To understand the challenges faced by U.S. manufacturers and gain insight into the nations collective plans for the future, the NGM team analyzed and collected information from more than 100 strategic plans, roadmaps, and vision documents published by industry, government, and academia over the past 5 years. Key points from these documents were then extracted and consolidated into a common framework to support development of the NGM vision and recommendations for action. The existing visions, roadmaps, and plans take a variety of forms. Groupings around industry sectors, products, and processes are prominent, and categories for grouping within these areas vary. Thirteen industry sectors were included: Agricultural Products, Aerospace, Automotive, Biotechnology, Chemical, Construction, Electronics, Information, Machine Tools, Materials Processing, Textiles & Apparel, Transportation, and General; these were addressed through a framework of the major elements of a roadmap (Vision, Goals, Needs, Drivers, Barriers, and Enablers). Following is a synopsis of the visions, goals, needs, drivers, and enablers that cross-cut the documents reviewed. Vision U.S. industry will be globally competitive through leadership in environmentally and technologically superior, low-resource intensive, sustainable manufacturing processes. Globally competitive industry will be focused on technological know-how, supply chain relationships, and agile organizations to continually find new approaches for innovation in product design, process technology, organizational structures, and strategic directions. Advanced information systems will revolutionize the way CEOs manage, how individuals relate, how they work together, and access information without regard to geographic distance or corporate boundaries. Vast amounts of information will be at workers fingertips, allowing them to tap into an extraordinary source of creativity and knowledge. Global communications networks will facilitate the flow of large amounts of data, video, and audio information while providing the utmost security and privacy. A heterogeneous network of computers and communications systems will provide complete interoperability and reliability for this knowledge. The future will be the era of mass creativity. Companies will have flexible organizational structures, treat workers as the most important company resource, and provide investment and profit sharing opportunities to all employees. U.S. industry will have broad, seamless integration, cooperation, partnering, and sharing of information, talents, and resources throughout the supply chain. Industry will develop a deep understanding of manufacturing processes, leading to cost savings and environmental benefits. Agile operations including increased automation, mass customization, quick response, and demand-activated manufacturing will be common throughout U.S. industry. Goals Key goals identified in the broad cross-section of roadmaps reviewed include: Increasing global competitiveness and access to/penetration of global markets; Establishing partnerships to leverage research and development assets and core competencies to improve all facets of business performance; Exploiting information systems technology to improve capabilities and responsiveness; Managing people as a vital strategic asset; Increasing the pace of innovation; Reestablishing U.S. leadership in materials processing and other key technology areas; Strengthening process technology focus to reduce costs and improve quality; and Improving performance in all areas of environment, health and safety.
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Needs Key areas of need identified to achieve these and related goals include: advanced process, business practice, and technology enablers; advanced materials and materials processing capabilities; human resources (trained, multi-skilled personnel); advanced product technologies for specific industries; advanced manufacturing processes; and advanced business practices. Drivers A number of key factors drive the identified goals and needs. These include: Increasingly complex and challenging customer requirements; Globalization expanding competition in what is rapidly becoming a single, global market with numerous distinct segments; Increasing pace of technological advance; Loss of U.S. technology leadership in areas formerly dominated; Regulatory/Environmental compliance requirements and policy impacts; Declining resources for industrial and government research and development; Increasing importance and impact of information systems technologies; and Economic growth. Barriers Numerous barriers to improving the performance and competitiveness of U.S. manufacturing were identified. Major barriers identified include: Government: Industry and government have been slow to respond to changing international business and manufacturing environment. U.S. government is poorly organized to deal with commercial technology policy. There is a lack of top-level recognition in the U.S. of the importance of manufacturing as a creator of wealth. A non-level playing field exists with regard to U.S. versus foreign government subsidies, cost and availability of capital, and industry-friendly practices, regulations, and policies. U.S. investment patterns do not foster manufacturing growth. The government has been hesitant to take a leading role in strengthening manufacturing. Research efforts are limited, fragmented, and uncoordinated. Federal acquisition processes and systems are inefficient and inflexible in practice due to archaic laws and policies. DoD is bureaucratic in habits and leadership, and burdensome contracting and accounting procedures impede the efficient maturation and management of technological growth. Industry: With the globalization of industry, the various cultural differences, political considerations, and human, organizational, and societal factors create significant constraints throughout the supply chain. Lack of management vision and understanding of the strategic benefits of technology hinder the exploitation and use of advanced information systems. Management of technology is inefficient, the culture of manufacturing is highly conservative, and the focus is on short-term profit not linked to long-term strategy. There is an aversion to both shared and individual risk. There is little payoff for risk-taking, so needed technology goes undeveloped. Current information technology is inadequate to support future manufacturing needs, and new technologies deployed are based on ill-defined, anticipatory, and competing standards. Supply chains are large, unwieldy, and poorly integrated. Insufficient knowledge, tools, and techniques exist to support design for affordability as well as performance, particularly early in the design phase before the conceptual design is frozen, at which 70% of the product life-cycle cost is established. There are a number of high-cost items (activities, processes, materials, components, assemblies, products) that need an order-of-magnitude cost reduction to be more universally usable. Academe: The educational and technical skills of workers are inadequate. K-12 school systems are not in step with industry needs (basic skills such as math and reading/writing). The perception among educators is that manufacturing is a second-rate career; therefore, most university professors are poorly informed about industry needs, and the needed multi-disciplinary curricula is slow to evolve. Specifically competent workers for tomorrows technological manufacturing are not now available and there is little prospect of improvement.
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Technology Enablers Key technology enablers identified include: integrated product/process development; new design processes for products and processes; efficient and accurate modeling methods and tools; planning, scheduling, and production systems to improve productivity and product costs; new control methods; complex systems that respond to change more easily and rapidly; new work handling methods to improve efficiency and flexibility of shop floor work flow; advanced materials; machine tool enablers; and advanced computer-based architectures and communications. Business Practice Enablers Key business practice enablers identified include: information systems; new accounting practices; flexible organization practices; alliances, rapid product/process realization; investment incentives; values and expectations alignment; benchmarking; and just-in-time philosophy. Cultural Enablers Cultural enablers found within current roadmaps of U.S. industry include: workforce innovations; creation of virtual enterprises; teaming; standardized training; continuous education; and standard computerized information and business tools. One key enabler was the development of metrics for evaluating workforce and management systems. Environmental Enablers Enablers for environmentally conscious manufacturing found within the roadmaps involve creating a mindset of environmental stewardship so that environmental concerns are addressed up front in planning processes, and developing processes which can be applied with minimal energy usage and materials consumption. Other key enablers identified include development and application of cost-effective cleanliness and environmental controls and standards, and basing environmental laws and regulations on sound science and relative risk.
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APPENDIX 3 Acknowledgments The report of the Next-Generation Manufacturing Project is the sum of an unprecedented collaboration of people from nearly every facet of manufacturing, and from the government and academic communities that concentrate on manufacturing issues. Each of the people listed below and on the following pages has enriched the dialogue in one or more of areas below throughout the short span of this project: The NGM Steering Committee Ten manufacturing industry associations whose visionary leaders foresaw the value of an all-compassing project and committed the resources to see it through. The NGM Executive Advisory Group Nearly 50 manufacturing senior executives whose leadership provided an important top-down view, adding content and opinion in one-on-one interviews, and in dialogue at governing board/corporate board or other meetings. The NGM Thrust Area Teams Six industry-led teams whose members generated a significant portion of the content of NGM, and whose commitment of time and travel was fully supported by their companies throughout the project. The NGM Roadmapping Task Force Which conducted an in-depth analysis of more than 150 industry and government roadmaps, providing for the first time in one document a means to identify manufacturing issues that cut broadly across manufacturings many sectors. The NGM Report Contributors/Authors/Reviewers Whose work is brought to light in this report. Ad-hoc Teams Whose members worked with extraordinary diligence to meet deadlines that were always too short. The 1996 Third Annual National Manufacturing Technology Conference Whose many participants provided invaluable content and constructive direction. All of the NGM participating associations and government agencies Who worked to widen awareness of the project and provide people and resources at the right place and the right time.
Philip Abramowitz, Ford Motor Company Don Achor, UTC/Pratt & Whitney Herb Ahrens, Polaroid Corp. Curt Airhart, OEC Medical Systems Susan Alexander, Lockheed Martin Energy Systems Gary Allen, Boeing Commercial Airplane Group Bob Allen, Pulse Engineering, Inc. Dennis Allen, South Carolina Research Authority Len Allgaier, General Motors Corp. (ret) Bruce Allison, Resources, Trade & Technology William F. Alzheimer, Sandia National Laboratories Deborah Amidon, Entovation International Larry Anderson, Alcoa Corp. Bert Anderson, Hewlett Packard Company Lindsay Anderson, The Boeing Company George Andrews, General Motors Corp. David Ardayfio, Chrysler Corp. Chris Argyris, Harvard University Jacquie Arthur, CP Clare Corp. Anderson Ashburn, American Machinist M. Rodema Ashby, Sandia National Laboratories Clint Atwood, Sandia National Laboratories John Larry Baer, Consultant Bill Barkman, Lockheed Martin Energy Systems Tom Barlow, Lawrence Livermore National Laboratory Frank Beard, Marine Mechanical Corp. Joel Beck, EMC Corp. Dave Beck, Oak Ridge Centers for Manufacturing Technology John Bedinger, Texas Instruments
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Robert Bescher, UTC/Pratt & Whitney Jay Bhardwaj, CP Clare Corp. Burt Birchfield, McDonnell Douglas Aerospace Wilbur Birchler, Los Alamos National Laboratory James Bird, Lockheed Martin Energy Systems Diane Bird, U.S. Department of Energy Gary Birkmeier, General Motors Corp. Thomas R. Blake, University of Massachusetts at Amherst Brench L. Boden, Wright Aeronautical Laboratories John Bodyk, UTC/Pratt & Whitney Duane Boning, Massachusetts Institute of Technology James Bonini, Chrysler Corp. Bob Booth, General Motors Corp. Geoffrey Boothroyd, Boothroyd Dewhurst, Inc. Joe Bordogna, National Science Foundation Kent Bowen, Harvard Business School Linda G. Bowling, Technologies Enabling Agile Manufacturing, Oak Ridge Centers for Manufacturing Technology Robert E. Boykin III, Consortium for Advanced Manufacturing International John Bradham, South Carolina Research Authority David Bradshaw, Lockheed Martin Energy Systems Doug Braithwaite, Braithwaite Associates Hap Brakeley, Andersen Consulting Kate Brayton, National Center for Manufacturing Sciences Lawrence Brekka, BDM Phil Bretz, Alcoa Corp. Jim Bronson, HJB Associates George Brooks, Allen-Bradley Company Bill Brosey, Lockheed Martin Energy Systems Robert Brown, Gillette Company Larry Bruno, Ford Motor Company Peter Buccieri, Lockheed Martin Art Buckland, CP Clare Corp. Randy Burch, Lockheed Martin Vought Systems Gary Burkart, AdvanceTek Bob Burleson, Lawrence Livermore National Laboratory Mitchell Burnman, Analytics, Inc. Marshall Burns, Ennex Fabrication Technologies Carl Burtner, Textron Inc.
Peter N. Butenhoff Textile/Clothing Technology Corp. N. Byron Canady, Allied Signal Brian Carlisle, Adept Technology, Inc. Dwight Carlson, Perceptron, Inc. Pat Carquello, Eastman Kodak Company Debbie Carr, Coalition for Intelligent Manufacturing Systems/R. Wayne Sayer Associates Charles F. Carter Jr., Association for Manufacturing Technology Mike Casey, Trident Systems, Inc. Richard Cassidy, Lockheed Martin Government Electronic Systems Dudley W. Caswell, Enterprise Innovation Bob Chapman, Industry Network Corp. Warren P. Chernock, National Science Foundation Carla Chirigos, Manufacturing Technologies Neil Christopher, National Institute of Standards and Technology Jung-Hoon Chun, Massachusetts Institute of Technology Clyde Church, Metalcraft Kim Cobb, Lockheed Martin Energy Systems David Cochran, Massachusetts Institute of Technology David Cohn, Whirlpool Corp. Dorothy Commassar, GE Aircraft Engines Gary Conkol, CAMP Inc. Jack Cook, Oak Ridge Centers for Manufacturing Technology Lillian Cooper, Allied Signal Federal Manufacturing & Technologies John Cooper, Ford Motor Company Jim Costa, Sandia National Laboratories at Livermore Dave Cranmer, National Institute of Standards and Technology Mark Crawford, New Technology Week Mike Cronin, Cognition Corp. M.B. Crotts, Crotts & Saunders Jeff Crowell, Price Waterhouse Alex dArbeloff, Teradyne Taylor Davis, Perceptron, Inc. John Davis, Telxon Corp. Don Davis, The Stanley Works (ret) Tom DeNoto, Polaroid Corp.
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Napoleon Devia, Iacocca Institute at Lehigh University Warren Devries, National Science Foundation Brent Diefenbach, Mel Technology Corp. Art Dirik, AD Little James Donaghy, Sheldahl James Drewry, Oak Ridge Associated Universities Joel DuBow, Massachusetts Institute of Technology Duane Dunlap, Alcoa Corp. William Dunlop, Texas Instruments James Dyer, Massachusetts Institute of Technology Tom Eagar, Massachusetts Institute of Technology Dennis L. Eilers, Sandia National Laboratories Allen Elkins, National System Management Corp. Robert S. Ellinger, Northrop Grumman Data Systems Donald Elson, Black & Decker Kate English, National Center for Manufacturing Sciences Dick Engwall, Westinghouse Electric Corp. (ret) and RL Engwall Associates Vah Erdekian, Bay Networks Paul Erickson, Sandia National Laboratories Joseph Erkes, General Electric Howard Esslinger, Texas Instruments Donald Esterling, Microcompatibles, Inc. Stanley Farnhom, SK Williams Company Robin Farran, Eastman Kodak Company Anthony Fedor, Eastman Kodak Company John Ferguson, EDS Michael Ferrantino, CP Clare Corp. Kenneth Fiduk, Trade Wave Marc Field, Agility Forum Thomas Fiorino, Production Tech., Inc. David Fitzpatrick, The Boeing Company Barbara Fossum, Reveille Technology and the IC2 Institute at University of Texas, Austin David Fradin, EMD Associates L. Nick Franklin, Delphi Saginaw Steering Systems Peter Freeman, Georgia Institute of Technology Stephen Freudenthal, IBM Corp. David Fuchs, Allen-Bradley Company Cita Furlani, National Institute of Standards and Technology
Terry Futrell, Oak Ridge Centers for Manufacturing Technology Paul F. Gallagher, Leaders for Manufacturing, MIT Hector Gallegos, Leaders for Manufacturing, MIT Dominic J. Gallello, Autodesk Glen Gardner, Andersen Consulting Terry Garland, EMC Corp. Garry Garrow, Consultant Howard Gerth, Lockheed Martin Energy Systems Bob Gilbert, Agility Forum Lou Glazer, Michigans Future, Inc. Lynne Glover, Industry Network Corp. Mike Glynn, A.T. Kearney Bradford Goldense, Goldense Group Richard Goldman, Concurrent Technologies Corp. Steven L. Goldman, The Agiity Forum Mario P. Gomez, WMI Diagnostic Engineering Fred Good, CCDI Composites Ted Goranson, Sirius-Beta Bob Graham, Rochester Institute of Technology, Manufacturing Application & Education Center Claude C. Gravatt, Georgia Institute of Technology/ National Institute of Standards and Technology Noel Greis, Kenan Institute of Private Enterprise John Grimm, Texas Instruments Michael Gulli, Deneb Robotics Robert W. Hall, Association for Manufacturing Excellence Steve Hamilton, Cornell University John Hannon, Pulse Engineering, Inc. Dwane L. Hansen Northeast Tier Ben Franklin Technology Center Bill Hanson, Leaders for Manufacturing, MIT David Hardt, Leaders for Manufacturing, MIT Rohn Harner, Eastman Kodak Company Robert Harris, Rockwell International Susan Hartfield-Wvnsch, General Motors Corp. Dick Hartke, National Center for Advanced Technologies Lowell B. Hawkinson, Gensym Corp. George Hazelrigg, National Science Foundation Jim Heaton, Oracle Inc. Dan Heinemeier, Electronics Industries Association John Heitmann, Corning, Inc.
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Jorma Helin, Finland Technology Center Mitchell H. Heller, Raytheon Company James Henderson, Oklahoma Center for Int. Design & Manufacturing William Henghold, HMR Associates Tom Heraly, Miller Electric Automation Jeffrey Hermann, University of Maryland George Hess, Ingersoll Milling Maching Merrill Hessel, National Institute of Standards and Technology Larry Higgason, Productivity Action Association Court Hilton, Intel Corp. Michael Hitchcock, Wright Aeronautical Laboratories Steve Holland, General Motors Corp. Edith Holleman, AFL-CIO/National Institute of Standards and Technology Sungho Hong, KIMM Hersch Hood, Lawrence Associates Charlie Hoover, Brooklyn Polytechnical University Wally Hopp, Northwestern University Sherel Horsley, Texas Instruments/EIA A.F. Houchens, General Motors Corp. Doug Howardell, Symbiotic Solutions, Inc. John C. Howe, TRW Dwayne Howell, Lufkin Industries, Inc. Neville Howell, Oak Ridge Centers for Manufacturing Technology Allan Hrncir, Texas Instruments Jamie Hsu, General Motors Corp. James J. Hughes, Westinghouse Electric Corp. (ret) Gary Hurst, Texas Instruments S.J. Hyduk, EDS Michael Hyser, Ward Machinery Company Toshifumi Inoue, Nissan R&D Inc. Joe Ivaska Jr., Tower Oil and Technology Richard F. Jackson, National Institute of Standards and Technology Sulekh C. Jain, GE Aircraft Engines Rick Jarman, Eastman Kodak Company Sundaresan Jayaraman, Georgia Institute of Technology Gordon Jefferson, GVJ Consulting Keith Jessen, Collins Avionics & Communications Sharon Johnson, Worcester Polytechnic Institute
Jim Jones, GM Hughes Richard C. Jones, The Boeing Company Scott Jones, CP Clare Corp. Jim Jordan, AdTech Cupertino Tony Juncaj, Automotive Industry Action Group Sanjay Kalpage, Leaders for Manufacturing, MIT Michael Kaminski, General Motors Corp. Karen Keefe, EMC Corp. Dick Kegg, Cincinnati Milacron Bernard J. Kelley, Merck & Company Inc. Pierette Kelly, Manufacturing Services, Inc. Sheron Kennedy, Lucent Technologies Ernest Kerzicnik, GE Aircraft Engines George Kettner, Economic Systems, Inc. Bob Kiggans, South Carolina Research Authority Paul Kilgoar, Ford Motor Company Carl Kilmer, Anderson Consulting Doris Kincade, Virginia Institute of Technology William Kingston, WK Systems Harsh Kippula, CP Clare Corp. Cal Kirby, Hughes Electronics Company Michael Kirkman, Agility Forum James Kiser, General Motors Technical Center Robert Klaiber, National Electronics Manufacturing Initiative Stephen W. Klein, Dyn Meridian Jan Klein, Massachusetts Institute of Technology T. Michael Knasel, Ohio Aerospace Institute Greg Kock, Alcoa Corp. Tom Kochan, Massachusetts Institute of Technology Morrie Koehler, Caterpillar Inc. John Kohls, Cincinnati Milacron Albert Konchar, Lucent Technologies Jim Koontz, Kingsbury Corp. Bruce Kramer National Science Foundation Arnold M. Kreigler, AMK Associates Terry Krinke, Ceridan, Inc. Norman R. Kuchar, General Electric Steve Kuhlman, Delco Electronics Dana Kuntz, Techmatics, Inc. Patricia Kutt, American Production and Inventory Control Society
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Paul Lambert, Polaroid Corp. Mark S. Lang, Northeast Tier Ben Franklin Technology Center William Lanser, General Motors Corp. James Lardner, Deere & Company (ret) Gregory Larsen, Strategic Development Kenneth P. Lasala, NOAA, US Department of Commerce Gary Laughlin, Sandia National Laboratories James LeBlanc, U.S. Tech International Jay Lee, National Science Foundation Hau Lee, Stanford University David Lehmann, Solar Turbines, Inc., a Caterpillar Company Alec Lengyel, Andersen Consulting and Agility Forum Peter Leonard, Ben Franklin Technology Center John Lepore, Technology Service Corp. Richard Lester, Massachusetts Institute of Technology Ming Leu, National Science Foundation Peter Likins, Lehigh University Don Liles, Automation & Robotics Research Institute Richard Lilly, Lilly Software Elaine Litman, CASL Mary Litsikas, Quality Magazine Arthur Long, Kennametal, Inc. Richard Lopatka, United Technologies Corp. Vernon Lott, Texas Instruments Bill Loveless, Federal Technology Report Carl Loweth, Deere & Company John Lubash, Ford Motor Company Ted Lundy, Center for Manufacturing Research Dave Lyijynen, Chrysler Corp. Frank Lyncit, Johnson Controls, Inc. Frank Macher, Ford Motor Company Tom Magnanti, Massachusetts Institute of Technology Tom Mahoney, National Academy of Sciences/ National Research Council Tom Malone, Massachusetts Institute of Technology Michael Mancuso, CP Clare Corp. Donald I. Manor, Deere & Company Chet Marchwinski, Productivity, Inc. Mark Marikos, Collins Avionics & Communications Sam Marin, General Motors Corp.
Douglas Marks, D.F. Marks Marketing Communications Peter A. Marks, Design Insight Craig Marks, University of Michigan Vicki Gordon Martin, Gordon Martin Associates Michael Mastracci, Techmatics, Inc. Mike Mastrianni, UTC/Sikorski Aircraft Corp. George McBean, Ford Motor Company Frank McCarty, Raytheon (retired) and the Society of Manufacturing Engineers Eldon Ray McClure, Tumax Engineering Steve McConnell, EMC Corp. Patrick McCoy, Lockheed Martin Energy Systems Howard McCue, Lawrence Livermore National Laboratory Mike McDermott, Carice Associates Bernie McElroy, Lockheed Martin Energy Systems Mike McEvoy, Baxter Healthcare Michael McGrath, Defense Advanced Research Projects Agency Steve McGregor, Pennsylvania State University Al McLaughlin, Lincoln Laboratories/MIT William McNally, U.S. Steel Dana Mead, Tenneco, Inc. Don Meadows, Lockheed Martin Aeronautical Systems Eugene S. Meieran, Intel Corp. Kevin Melia, Manufacturers Services Ltd. Aris Melissaratos, Westinghouse Electric Corp. Jim Meloy, Autodesk Dave Mentzer, Digital Equipment Corp. John Mercer, Mercer & Associates Tom Methenitis, Andersen Consulting John Meyer, National Science Foundation Fred Michel, Factory Operations & Factory Automation William Miller, Industry Net Report Ralph Miller, Northrop Grumman Corp. Kevin Miller, Society of Manufacturing Engineers John J. Mills, Agile Aerospace Manufacturing Research Center Mary Mitchell, National Institute of Standards and Technology David Mitchell, Rockwell International Eric Mittelstadt, Fanuc Robotics, North America, Inc.
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George Mochnal, Forging Industry Association Bill Morin, Coalition for Intelligent Manufacturing Systems/R. Wayne Sayer & Associates Richard Morley Flavors Technology Ed Morris, Lockheed Martin Vought Systems Harry Moser, Charmilles Technologies Jason Motsko, Agility Forum Sherman Mullen, Andersen Consulting Richard Murphy, Wheelabrator Technologies Inc. Tom Murrin, Duquesne University William Musser, GEC Marconi Electrical Systems Steve Nagey, Chrysler Corp. Michael Nash, Institute for Defense Analyses P. Ranganath Nayak, Arthur D. Little Richard Neal, Oak Ridge Centers for Manufacturing Technology Jim Nell, National Institute of Standards and Technology Ted Y. Nickel, Northeast Tier Ben Franklin Technology Center Hossein Nivi, Ford Motor Company Hank Noel, Consultant Woody Noxon, Consortium for Advanced Manufacturing International Jeanette Nymon, Alcoa Corp. John W. OConnor, Sandia National Laboratories at Livermore James ONeil, Kingsbury Corp. Joseph R. Oldfield, Polaroid Corp. Bob Painter, Lockheed Martin Energy Systems Larry Papay, Bechtel John Parkinson, SRI International H. Van Dyke Parunak, ITI, University of Michigan Rusty Patterson, Agility Forum Anand Paul, Concurrent Technologies Corp. Glen Pearson, Eastman Kodak Company Sam Pearson, Enterprise Solutions Richard Pearson, Ford Motor Company James Peoples, Lockheed Martin/ DSM Engineering Plastic Products David Peyton, National Association of Manufacturers John Pfeiffer, Institute of Advanced Manufacturing Sciences
Steven Phillips, Case Western Reserve University Al Philpotts, Agility Forum Francis Pijar, UTC/Pratt & Whitney Billy Plant, Allied Signal Federal Manufacturing & Technologies George Plossl, G & W Plossl Co. Adrian Popa, Hughes Research Laboratory David Porreca, National Coalition for Advanced Manufacturing Dave Post, Oak Ridge Centers for Manufacturing Technology Guy Potok, Fanus Robotics, North America, Inc. Pepe Portvondo, Consultant Tom Powers, New Mexico State University Biren Prasad, EDS Kenneth Preiss, Agility Forum and Ben Gurion University Patrick E. Price, Wright Aeronautical Laboratories Carol Ptak, Association for Planning and Inventory Control Rick Purcell, BMP//Office of Naval Research John Ramsey, Lockheed Martin Telecommunications John Rannenberg, Coopers & Lybrand Manash Ray, Lehigh University Leo Reddy, National Coalition for Advanced Manufacturing Ramona Reddy, West Virginia University Lowell Reed, Torrington Company/Ingersoll Rand Allan Reich, dAncona & Pflaum Brenda Reichelsderfer, ITT Defense & Electronics James W. Reilly, Enterprise Development Center Herman Reininga, Rockwell Collins Jeffrey Remmel, Sagent Corp. Robert C. Reuter Jr., Sandia National Laboratories Frank Reynolds Jr., Eastman Kodak Company George Reynolds, Northrop Grumman Corp. Charles Rice, Chrysler Corp. Jim Rice, Massachusetts Institute of Technology Robert L. Rice, Wright Aeronautical Laboratories Chet Richards, Lockheed Martin Aeronautical Systems John Richardson, Texas Instruments Brenda Richelderfer, ITT
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Steve Ricketts, National Center for Manufacturing Sciences Frank J. Riley, The Bodine Corp. Ron Ripley, Lilly Software Ian-Richard Robinson, Achelous Groupe Pete Rock, Chrysler Corp. Jamie Rogers, Automation and Robotics Research Institute Kenneth D. Rolfes, Graphic Controls Corp. Eric A. Rose, Ford Motor Company Allen Rose, Inverness International Jerry Rosser, Hughes Aircraft Company Don Runkle, General Motors Corp./Delphi Energy & Engine Management Systems Scott Ruska, Intel Corp. Jack Russell Modernization Forum Hal Salzman, Jobs for the Future Thaddeus Sanford, Boeing-North American, Inc. Charles Savage, Knowledge Era Enterprises, Inc. R. Wayne Sayer, Coalition for Intelligent Manufacturing Systems/R. Wayne Sayer Associates Sal Scaringella, Enterprise Agility International Mary Jo Scheldrup, Rockwell Collins Cecil W. Schneider, Lockheed Martin Aeronautical Systems Dave Scott, Equipto Richard Scott, West Bend Warren Seering, Massachusetts Institute of Technology Tom Shaw, Andersen Consulting Russell Shorey, Consultant Kristin Short, Massachusetts Institute of Technology Herb Shumway, Digital Equipment Corp. Daniel Shunk, CIMS/Arizona State University Trent Shute, Rhne-Poulenc Stan Siegel, National Center for Advanced Technologies Whitey Simon, General Motors Corp. Peter Smith, CADKEY, Inc. Lance Smith, Switched Network Technologies, Inc. Wayne L. Snyder, Consultants & Associates Co. Michael Splinter, Intel Corp. Rob Steele, Oak Ridge Centers for Manufacturing Technology
Wayne Stewart, Whirlpool Corp. Irving Stowers, Lawrence Livermore National Laboratory Brian Stucke, U.S. Air Force K. Subramanian, World Grinding Technology Center/ Norton Company George Sutherland, CAMP Inc. Robert E. Swanson, Concurrent Technologies Corp.. Gary L. Swanson, Design and Manufacturing Corp. Jack Swindle, Texas Instruments Joe Syslo, National Center for Advanced Technologies Dorothy Terrell, Sun Express Nick Terzis, UTC/Pratt & Whitney Bikash Thapliya, Massachusetts Institute of Technology Orapong Thien-Ngren, Andersen Conslulting Gary Thompson, Rockwell-Collins Scott Thurber, Air Products and Chemicals, Inc. Lester Thurow, MIT Sloan School of Management Frank Tidabeck, Caterpillar Inc. Joan Tierney, Rochester Institute of Technology Andy Tkach, Concurrent Technologies Corp. Thomas Tobey, Boeing Commercial Airplane Group John Tobin, Siemens Corp. Fred Traversi, Taco Bell Linda K. Trocki, Bechtel Brian Turner, Work and Technology Alliance Matthew Ulvi, Techmatics, Inc. George Vlay, Systems Management Associates Ted Vojnovich, U.S. Department of Energy Ray Walker, UTC/Pratt & Whitney Janet Waters, E.I. du Pont de Nemours & Company Dan Weaver, Fort Wayne Foundry Kirk Weber, Boeing-North American, Inc. Alan Weber, SEMATECH Barry Weeks, RW Consulting, Inc. M. Duane Weltha, Consultant Steve Wheelwright, Harvard Business School Jack White, Industrial Technology Institute Michael White, UTC/Pratt & Whitney Sean Willems, Massachusetts Institute of Technology Lynn Williams, United Steel Workers (ret)
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Robert Willis, U.S. Product Data Association Terry Wohlers, Wohlers Associates Mathilde Wood, Leaders for Manufacturing, MIT Ralph Wood, United Technologies Corp. Steve Woods, The Boeing Company Mike Wozny, Renssalaer Polytechnic Institute Charles W. Wyble, Charles William Wyble Consulting Frank Yank, Auburn University
Tom Yerlay, Miller Electric Automation John Yochelson, Council on Competitiveness Jim Yoder, Sandia National Laboratories Tom Young, Sandia National Laboratories Robert Zaciewski, General Motors Corp. Melissa Zeltmann, National Institute of Standards and Technology Nello Zuell, Vision Systems International
No body of work this size can be accomplished without the tireless and thankless efforts of people working behind the scenes to keep the project on schedule, resolve differences of opinion, keep everyone informed, work around the clock to overcome problems, and sacrifice their time and personal lives for the good of the project. Hundreds of people contributed to the success of this project, and everyones contributions are greatly appreciated. The NGM Principal Investigator organizations would like to thank our staff leaders, without whom the project would not have succeeded. Al Philpotts has done yeoman duty as the project coordinator. Jim Hughes, in his role as program director, provided excellent steerage and served as a troubleshooter. Doug Marks, as the lead writer/editor of the documents, amazed us all. Bill Brosey, Paul Gallagher, and Kenny Preiss served as the PI assistants and coordinated the activities for which we were responsible. We extend our sincere appreciation to each of these individuals for their allegiance and service.
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Volume II Imperatives for Next-Generation Manufacturing

January 1997
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NGM IMPERATIVE PAPERS

Workforce Flexibility Knowledge Supply Chains Rapid Product/Process Realization Innovation Management Change Management Next-Generation Manufacturing Processes & Equipment Pervasive Modeling & Simulation Adaptive, Responsive Information Systems Extended Enterprise Collaboration Enterprise Integration.
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A Next-Generation Manufacturing Imperative
January 1997
Prepared By: The NGM Workforce Issues Thrust Team
N EX T-G ENER ATIO N M ANUFACTUR ING P R O JECT
CONTRIBUTORS Douglas C. Braithwaite, Digital Equipment Corp., (ret) Lead Author Lindsay Anderson, Boeing Company David Ardayfio, Chrysler Corp. Chris Argyris, Harvard Business School Kent Bowen, Harvard Business School Lloyd Baird, Boston University Duane Dunlap, Alcoa Brian Cargille, Intel Corp. Jim Duley, Hewlett-Packard Jim Dyer, Polaroid (ret) Jeff Elton, Intergral Corp. William C. Hanson, Leaders for Manufacturing Program, Massachusetts Institute of Technology David Hartzband, Digital Equipment Corp. Court Hilton, Intel Steve Holland, General Motors Jan Klein, Massachusetts Institute of Technology Tom Kochan, Massachusetts Institute of Technology Dorothy Leonard-Barton, Harvard Business School Angela Locascio, Motorola Dave Mentzer, Digital Equipment Corp. Gene Meieran, Intel Corp. Steve Nagy, Chrysler Corp. Hossein Nivi, Ford Motor Company Glen Pearson, Kodak Kenneth Preiss, Agility Forum Scot Ruska, Intel Corp. Kristin Short, Massachusetts Institute of Technology Eric Thorgerson, Polaroid Steve Wheelwright, Harvard Business School Ralph Wood, United Technologies Corp.
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FOREWORD The Next-Generation Manufacturing Project was initiated in 1995 to develop a framework for action that U.S. manufacturers, individually and collectively, can use as a guide to chart a course for success in an increasingly complex and competitive global business environment. Individuals from more than 100 companies, industry associations, government agencies, and academic institutions have worked together to develop a broadly accepted framework for next-generation manufacturing enterprises. They identified key competitive drivers of the next-generation environment; defined attributes and imperatives required to respond to these drivers; and developed recommendations for actions that industry, government, and academia can take to help American manufacturers thrive in the intensely competitive and dynamic global markets of the 21st Century. This document is part of the NGM Project Report, which summarizes the research, findings, and recommendations developed by the NGM Project Team. The full report comprises the following volumes: Executive Overview, which presents a management overview of the project results Volume I, Summary Report , which presents the project teams findings and recommendations Volume II, Imperatives for Next-Generation Manufacturing, which presents individual papers on the 10 NGM Imperatives, as follows: Workforce Flexibility Knowledge Supply Chains Rapid Product/Process Realization Innovation Management Change Management Next-Generation Manufacturing Processes & Equipment Pervasive Modeling & Simulation Adaptive, Responsive Information Systems Extended Enterprise Collaboration Enterprise Integration. Volume III, Digest of U.S. Industry Roadmaps , which abstracts strategic plans and roadmaps developed by industry and government over the past 5 years Volume IV, Views of the Future, which samples current thinking about the 21st Century competitive environment and the evolution of the manufacturing industry. For a full copy of the report or more information about NGM, please contact: NGM Project Office 125 Goodman Drive Bethlehem, PA 18015-3715 Telephone: 610-758-5510 Fax: 610-694-0542 E-mail: info@agilityforum.org http://www.agilityforum.org
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PREFACE Unprecedented, interrelated changes in the global business environment are creating entirely new success factors for industrial competition. How do U.S. companies respond to the new challenges of global competitiveness? How do they resolve the dilemmas inherent in the new competitive environment? How do manufacturers respond in this era of rapid and profound change? What actions can help companies adapt their enterprises to meet the challenges of the next generation? The NGM Project provides a framework for developing those answers. NGM is an industry-led effort, made possible with support of the U.S. Department of Energy, Department of Defense, National Institute of Standards and Technology, and the National Science Foundation, and building on other national manufacturing initiatives, to: Develop a broadly accepted model of future manufacturing enterprises Recommend actions that manufacturers, working individually and in partnership with government, industry, and the academic community, can use to attain world-class status. The NGM concept is founded on a common framework that companies can apply to develop an understanding of where they need to go to be competitive in the next generation, and how they can get there. The framework, shown at top right, uses a hierarchical format that first identifies the Global Drivers of the new marketplace: Ubiquitous availability and distribution of information Accelerating pace of change in technology Rapidly expanding technology access Globalization of markets and business competition Global wage and job skills shifts Environmental responsibility and resource limitations Increasing customer expectations.
The NGM Framework

Global Drivers
From these Drivers emerges a set of Attributes that next-generation companies and enterprises must possess to succeed in the next generation: Customer Responsiveness The NGM Company will work with customers, and in anticipation of customers, to supply integrated products and services that fit evolving life-cycle requirements of function, cost, and timeliness. Physical Plant and Equipment Responsiveness The NGM Company will employ an ever-growing knowledge base of manufacturing science to implement reconfigurable, scaleable, cost-effective manufacturing processes, equipment, and plants that adapt rapidly to specific production needs. Human Resource Responsiveness The entire workforce of the NGM Company will comprise highly capable and motivated knowledge workers who can operate in a flexible work environment, with substantial independent decision-making. Global Market Responsiveness The NGM Company will develop its manufacturing strategy to anticipate and respond to a continuously changing global market, with operations and infrastructure tailored to local requirements.
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Teaming as a Core Competency The NGM Company will team within and outside the company to acquire and focus needed knowledge and capabilities to develop, deliver, and support its products and services. Responsive Practices and Cultures The NGM Company will continuously evolve core competencies, organizational structure, culture, and business practices, enabling it to anticipate and respond rapidly to changing customer demands. Key enablers to attain these attributes and surmount the inevitable barriers and dilemmas along the way are defined as Imperatives, from which arise specific Action Recommendations that can be acted upon to move toward the next generation. The 10 Imperatives identified as essential to the realization of NGM Companies and NGM Enterprises are as follows: People-Related Imperatives: Workforce Flexibility Knowledge Supply Chain Business Process-Related Imperatives: Rapid Product/Process Realization
Innovation Management Change Management Technology-Related Imperatives: Next-Generation Manufacturing Processes & Equipment Pervasive Modeling and Simulation Adaptive, Responsive Information Systems Integration-Related Imperatives: Extended Enterprise Collaboration Enterprise Integration This document, a part of Volume II Imperatives for Next-Generation Manufacturing of the NGM Project Report, draws extensively on data and information developed in the other areas of the report notably Volume III, Digest of U.S. Industry Roadmaps, and Volume IV, Views of the Future. Those individuals who read this Imperative paper as a stand-alone document should also review Volume I, Summary Report, which provides a broad overview of the NGM concept as well as a top-level integrated presentation of all NGM Imperatives and their supporting Action Plan recommendations.
NGM Project Report Structure

Executive Overview Volume I Summary Report Volume II Imperatives for NextGeneration Manufacturing
Volume III Digest of U.S. Industry Roadmaps
Volume IV Views of the Future
The NGM Imperatives in Context Some companies have some NGM attributes to varying degrees today, but none is close to mastering them all. To thrive, or even survive, by the usual measures of sustained profitability and customer, workforce, and shareholder satisfaction, todays manufacturing company will have to make a complex transition. It must learn to operate in a rapidly, ever-changing global economy and respond to increasingly demanding social and environmental responsibilities. The NGM Imperatives are key to meeting these challenges. They are applicable to most industries, whether batch- or process-oriented, servicing commercial, consumer, or military markets; and are as applicable to a small company as to a large one. In fact, implementation in a small company may be easier, since fewer people and functions are involved. They are not, however, not all-inclusive. As an example, they do not address: 1) company capabilities already widely assumed as conditions of doing business, such as world-class quality or environmental responsibility; or 2) resolution of macro-issues such as population demographics and migrations or finite limitations of the biosphere. Although these topics must be considered in planning for implementation of the Imperatives, they are already widely addressed in programs and forums outside the immediate realm of manufacturing . Over time, as the actions suggested in the NGM Imperative papers are implemented, the people, business processes, and technologies of the Company will evolve into a dynamic network of integrated work units, each of which can be represented as an NGM enterprise as shown below. The figure also illustrates the overarching need to simultaneously address all actions with a unified approach to People, Business Processes, Technology, and Integration the four elements of the NGM model. No single Imperative can help a company realize more than limited progress toward any one NGM Attribute. Each of the Imperatives provides inputs to, and leverages the outputs of, multiple Attributes as indicated in Table I on the following page. Likewise, each of the Imperatives is strongly interdependent with multiple other Imperatives (see Table II on the following page). The NGM Company must therefore incorporate aspects from multiple Imperatives simultaneously while balancing the realtime needs and resource constraints of the organization.
People
The NGM Company

The NGM Company will succeed through the integrated performance of people, business processes, and technology.
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Table I. Impact of Imperatives on Achieving NGM Attributes

Physical Plant & Equipment Responsiveness
Imperatives Workforce Flexibility Knowledge Supply Chain Rapid Product/ Process Realization Innovation Management Change Management NGM Processes & Equipment Pervasive Modeling & Simulation Adaptive, Responsive Information Systems Extended Enterprise Collaboration Enterprise Integration H - High Impact M - Medium Impact
H L H H H M H H H H L - Low Impact
H L M H H H H M L M
H H H H H M L M M H
H L H H H M H H H H
H H H H H M M M H H
Table II. Interdependencies Between NGM Imperatives

Rapid Product/Process Realization Adaptive, Responsive Information Systems Knowledge Supply Chain Extended Enterprise Collaboration
H H H H * M M M M H M M H H H M H H * H M H H M * H H H H H * H H M H H *
Workforce Flexibility Knowledge Supply Chain Rapid Product/ Process Realization Innovation Management Change Management NGM Processes & Equipment Pervasive Modeling & Simulation Adaptive, Responsive Information Systems Extended Enterprise Collaboration Enterprise Integration H - High Impact
* H M M H M M H H H
H * M M
M M * H H
H H M * H
H M M H *
M M H H H
M M H M
H H
H H H
H H H
M - Medium Impact
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H H H M
Impact On
NGM Processes & Equipment
Change Management
Responsive Practices and Cultures
Teaming as a Core Competency
Impact On NGM Attributes

Customer Responsiveness
Human Resource Responsiveness
Global Market Responsiveness
H M M H H M L M H H
This is especially true when Imperative implementation is tailored for: A specific industry The size, type, and complexity of the business itself The companys position in its supply chain(s) The education and skills of the companys workforce. The maturity level of the business processes and technologies needed for the business to thrive. In contemplating implementation, the view of the NGM framework must be expanded to illustrate the inclusion of needs assessment at the strategic, operational, and tactical levels, as shown at right. The NGM Enterprise Operational Strategies Within the NGM framework, the enterprise Attributes define the broad scope of the strategic vision, as is discussed in Volume I, Summary Report. Most companies translate company strategic visions, missions, goals, and objectives to operational strategies and apply them tactically. In like manner, the NGM Imperatives represent the operational and tactical strategies for attaining NGM Attributes. To an individual company, this means that Imperative implementation actions would most likely have to be integrated into specific strategies for key operational functions of the enterprise, such as: Market Development Portfolio Management Technology Product Development Product Life Cycle Process Development Environmental Innovation Sourcing/Teaming
Individual companies apply the NGM integrated four-cornerstone approach (people, business processes, and technology) at their strategic, operational, and tactical levels.
Global Drivers
NGM Company Strategic Level Operational Level Tactical Level
Individual Company Imperatives & Action Plan Recommendations
Investment/Finance Human Resources Knowledge Supply Information Systems. Table III on the following page shows the relationship of NGM Imperatives to a typical companys areas of operational strategic focus. As shown in this table, there is a high degree of interdependence between and among these operational strategies. Each NGM Imperative paper has an expanded discussion of these strategies. A company needs to tailor its specific operational strategies and Imperatives for its particular situation.
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Table III. Relationship of NGM Imperatives to Operational Strategies

Portfolio Management Product Development Market Development Information Systems Operational Strategies Process Development
Investment/Finance
Technology
Imperatives Workforce Flexibility Knowledge Supply Chain Rapid Product/ Process Realization Innovation Management Change Management NGM Processes & Equipment Pervasive Modeling & Simulation Adaptive, Responsive Information Systems Extended Enterprise Collaboration Enterprise Integration
X X X X
X X X X X
X X
X X
X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X
X X X X X
X X X X
X X X
X X X X X X
X X X X X X
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Knowledge Supply
Product Life Cycle
Human Resources
Sourcing/Teaming
Environmental
Innovation
CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 Introduction: A New Dependence On The Workforce.......................................................................... 3 1.1 A Direction in Uncharted Terrain..................................................................................................... 4 1.2 Responding to Uncertainty at All Levels of the Workforce................................................................ 4 1.3 Global Economics............................................................................................................................. 5 1.4 New Directions, New Obstacles Require New Skills......................................................................... 6 2.0 Characteristics of the Next-Generation Workforce ................................................................................ 7 2.1 Discretionary Effort and Workforce Innovation ............................................................................... 7 2.1.1 Discretionary Effort................................................................................................................. 7 2.1.2 Discretionary Leadership......................................................................................................... 8 2.1.3 Trust....................................................................................................................................... 9 2.1.4 Paradoxes of Workforce Innovation ...................................................................................... 10 2.2 Lifelong Learning............................................................................................................................ 12 2.3 Teaming and Partnering: Shared Leadership................................................................................... 14 2.4 New Partnerships: Individual/Company/Community .................................................................... 17 3.0 New Social Contracts ........................................................................................................................... 20 3.1 The Demise of the Old Social Contract .......................................................................................... 20 3.2 Toward a New Social Contract ....................................................................................................... 22 4.0 Action Recommendations .................................................................................................................... 24 5.0 Sources ................................................................................................................................................. 25
EXECUTIVE SUMMARY Workforce/Workplace Flexibility is a new set of practices, policies, processes, and culture that enables the employee to feel a sense of security and ownership while enabling a company to capitalize on the creativity, commitment, and discretionary effort of its employees, while at the same time maintaining the flexibility to continually adjust the size and skills of the workforce. Why is it Important? The demands of partnerships and requirements for structure and control in global extended enterprises, coupled with the benefits of rapidly changing technologies, will force companies to continually adjust the size and skill sets of their workforce to remain competitive in the Next Generation. At the same time, the need for speed and innovation requires companies to utilize and reward the knowledge effort of all its employees. As a result, the Next-Generation Workforce and Workplace will be radically different than at present. It will be characterized by a dependence on discretionary effort and innovation throughout the workforce, lifelong learning as part of the everyday worklife, and new levels of teaming and partnering, where leadership is shared and trusting becomes part of the culture. Key Concepts Discretionary Effort: Competitive success is driven by levels of performance far beyond fulfillment of stated job descriptions. This level of commitment of the whole persons mind and effort only comes when the individual feels ownership of a task and is recognized and valued as an asset rather than treated as an expense. Lifelong Learning: Continuous learning is required to overcome rapid skills obsolescence. Individuals and companies share responsibility for this learning, and individuals must acquire for themselves what companies do not provide. These skills are the base for their economic security and provide the source of innovation required by the enterprise. Shared Leadership, Teaming, and Partnering: Teaming requires the sharing of power; shared power requires new levels of trust; sharing power and trusting the workforce revise the roles of the traditional managers; leadership and shared power will shift the control/innovation balance away from control toward innovation. The Role of the Individual, Company, and Community The Extended Enterprise: As companies compete as part of extended enterprises, they increasingly depend on human resources that are not members of their own company. All members of next-generation workforces will have to be recognized and treated as equal and empowered partners who operate with a sense of ownership for the enterprise. Companies will locate where the infrastructure of skilled human resources and technology pull exist. Enterprises amplify these positive characteristics by partnering with the community and individual. Companies cannot develop this infrastructure alone. What's New? Workforce Flexibility implies both workforce and workplace flexibility. The task for achieving the flexibility can not just fall on the people that make up the traditional wage-earning workforce. The practices and policies that define and govern the workplace and organization must also change. Some new practices are: Negotiating for mutual gain New mediating institutions for knowledge workers moving across organizations Job/skill placement-focused associations that help individuals locate and obtain new assignments Skills certification to facilitate transfer between enterprises and minimize ramp-up time for full use Pension and portable benefits.
The future workforce cannot be the segmented body that exists today. It must be recognized as an integrated body where everyone is both labor and management; provides both knowledge and leadership; is both a leader and a follower; and is responsible for both productivity and innovation. All are owners responsible for providing the products, services, and results that satisfy all the enterprises stakeholders, but in so doing all share in the rewards and risks that result from meeting customer and stakeholder needs. As a result of all of these forces a set of new social contracts are needed that extend beyond workers and management to include the individual, the extended enterprise, and the community. All elements will share responsibility for workforce development and learning will become as important as producing. Action Recommendations 1. Establish a Workplace Laboratory to Identify and Pilot Practices Required for a New Social Contract A Laboratory is needed to identify the features of a new social contract suited to the economy of the future and to promote experiments needed to develop them. A Workforce Laboratory would provide a forum for the diverse stakeholders to come together to jointly research the developing current practices and needed innovations for a successful new social contract. Research topics would include: Open information sharing on issues affecting the enterprises, industry's, and individuals economic security for flexibility to use resources efficiently. Worker commitment and teamwork for a voice on the job and greater workforce democracy. Training for sustained employment in return for worker commitment to lifelong learning. Where unions represent workers, union management partnerships oversee and support workplace problem solving in return for an expanded role in enterprise decision-making. Expanded mediating institutions for facilitating job transitions and representing the voice of the worker. Legal policies to support the new contracts.
1.0 INTRODUCTION: A New Dependence on the Workforce Workforce/Workplace Flexibility refers to the new working environment defined by new practices, policies, processes, and culture that enable the employee to feel a sense of security and ownership and which enable a company to capitalize on the creativity, commitment, and discretionary effort of a workforce that adjusts its size and skills according to stakeholder needs. What drives the evolution of the new workforce and the new workplace? Perpetual change will be a fundamental condition in the next generation of manufacturing, and the future will not be a mere extension of the past. The drivers of change in the business climate technological change, globalization, and stakeholder sophistication all place new demands on workforce performance. Competitive advantage is achieved by the enterprise that can most quickly provide a cost-effective, creative solution to meet a customers need. The dynamics and uncertainty of the future will continually push the responsiveness, flexibility, and quickness of the enterprise workforce. The need for speed and innovation requires companies to use and reward the knowledge effort of all its employees. At the same time, the demands of partnerships and requirements for structure and control in global extended enterprises, coupled with the benefits of rapidly changing technologies, will force companies to continually adjust the size and skill sets of their workforce to remain competitive in the next generation. To have both increased individual contributions and increased flexibility, workforce adjustments must occur in ways that benefit the individual, the company, the customer, and the community. Fundamentally new workforce/workplace conditions must be accompanied by employment policies that strengthen security either in the firm, in the extended enterprise, or through lifetime employability for individuals. Workforce flexibility implies both workforce and workplace flexibility, or workforce infrastructure flexibility. The task of achieving this flexibility cannot just fall to the traditional wage-earning workforce. The workplace and the practices that define and govern the place and organization must also change. The duality of both individuals and the structures within which they work must be recognized. In this partnership approach, NGM companies will be better served by incorporating the aspirations of individuals (managers, engineers, workers...) than by trying to subdue or eliminate them by technical or organizational means. The four key forces of change discussed below reinforce the critical need for workforce flexibility. 1.1 A Direction in Uncharted Terrain The issues driving the current and future workforce are unclear, imprecise, and subject to rapid change. They appear more like compass headings than welldefined roadmaps. A compass is helpful when one is not sure where one is, and can get only a general sense of direction.
Compasses and Maps
In the physical world there are two ways to navigate in unfamiliar territory using a map and using a compass. Often these are complementary for example, when one uses the compass to orient a map. At other times, the two methods may contradict when the map suggests that in order to avoid an obstacle one has to go in a direction different from that indicated by the compass, or when the compass is affected by local magnetic fields. When the territory is open, with clear landmarks and no dangers, either method may suffice. Sometimes only one method may be effective: a compass is essential if you are lost at sea, but only a map will do in downtown Boston. Maps, by definition can help only in known worlds. Conversely, people all laughed at maps of the world when the world was thought to be flat. 1 Addressing workforce/workplace issues requires more of a compass mentality because the very term Next Generation is about a largely unknown future. The focus is on radical concepts, on action projected from experience and learning. The goal is to perpetually provoke the enterprise to move to the next phase. When launching into this uncharted territory, there are no maps or worse, the maps are fantasies, for the most part fatally flawed if too much is expected of them.
Hurst, David, Crisis and Renewal: Meeting the Challenge of Organizational Change, Harvard Business School Press, 1995, pp. 16769.
People often act as if they are implementing a Strategic Master Plan when in fact they are muddling through as they explore new territory with a compass affected by poorly understood magnetic fields and only grossly accurate maps. It is only in hindsight that we can string unconnected events into a coherent stream. The danger of a rational, after-the-fact account is that it tempts us to try to over-engineer a process that is to a significant degree unpredictable. Enterprises, through their workforces, must respond to the compass headings by being flexible and adapting to obstacles encountered in following these headings. Above all, this requires creativity and innovation. Maps will be made around obstacles as they become understood. New obstacles mean new strategies, new processes, and new solutions, but few things will remain constant and much will be ever-changing. A compass will always be needed, as will the demand for people who can act quickly and wisely. 1.2 Responding to Uncertainty at All Levels of the Workforce Where maps do not exist, unknown obstacles arise. There is a certain skill in responding to the unknown, typified perhaps by expedition guides who have to instantaneously respond to obstacles that emerge on a trip down a river. As the pace of change increases, this type of skill becomes more necessary in a manufacturing enterprise, and it must be a pervasive skill since change impacts all aspects of companies.
Wild Rivers and the Value of Practice Theory When I used to kayak down the Colorado River, or as was more often the case, hike the Virgin River Narrows, we all knew where the big rapids and major choke points were but more importantly, we also knew another thing that made the experience successful and great fun. We knew that the river canyon would never be exactly the same; major features would likely still be in place but logjams, boulders, and sand bars could have shifted, drifted away, new ones appeared, etc. The Colorado River I used to know is now in a very wet grave deep under Lake Powell, but The Narrows remain unchanged just miles from my boyhood home. (At points two people can stand in the middle of the river, join hands and span the vertical walls which twist vertically up about a thousand feet.) On that hike, flash floods often scour away sand bars, requiring hikers to swim a week after we had hiked through the same section on dry ground. Small waterfalls disappear and reappear. Monstrous ponderosa trees temporarily jam the canyon, creating ponds and quicksand. It is wondrous! The Narrows are one of the places that even short-lived humans can experience the power of a canyon-cutting river in action.
The workforce is the element of an enterprise that is potentially the most responsive to the changing One can label this sort of thing chaotic, but that is a big part of the fun. demands in the market, and the There are people who guide others through adventures like these, as a most flexible in adapting new career, without serious mishaps. Theirs is an art more than a science, but it has elements of both. It would be a waste, counter-productive technologies and knowledge, and to leave the experience to only professional geologists or explorers. adapting to changing cultures, Similarly, a learning business, a responsive enterprise, must, by definition, customers, and demographics. be filled throughout with people who seek out and enjoy corporate However, the dynamics and unequivalents of river runs and deep canyon hikes. certainty of the future will continually demand, stretch, and test the responsiveness, flexibility, and quickness of the workforce. The need for perpetual speed and innovation requires companies to use and reward the creativity, knowledge, and leadership efforts of all its employees. The NGM Enterprise will constantly seek to transition its total workforce from a tool it uses to something akin to a living, dynamic organism that is self-acting to external stimuli. The output of the enterprise is the result of the collective efforts of the whole workforce which in turn, is the collective output of the individuals that comprise that workforce. The future workforce must be recognized as an integrated body where everyone is both labor and management, is both leader and follower, provides both innovation and productivity. This concept embraces the whole extended enterprise, at all levels. All individuals throughout the workforce will have to look for opportunities for competitive advantage and be the ones to capitalize on them. The individual who first sees a need has to have the knowledge and skills and authority to take positive action to meet the needs. Uncertainty will demand application of new knowledge and skills. Acquiring new skills, or reacting to new problems, cannot be separate from the normal work routine. It is one of the single most critical aspects of
work. To be successful, the enterprise must provide an environment where it can maximize the learning of new skills for each individual in the workforce. 1.3 Global Economics While many of the barriers facing the workforces of the future are not known, there is one that is more defined that provides a general compass heading. Globalization of markets and labor supplies continues to increase, and it is a predictable trend that requires a well-defined strategic map. This driving force poses different challenges for developing and developed regions. The flow of information and knowledge around the world is virtually immediate.
Global Wage Differentials Rich countries can no longer automatically generate higher earnings for their low-skill workers simply by employing more capital, cheaper raw materials, or better technology than their poorer neighbors. Consider Eastern Europe. Drive 1 hour east from Germany and you will find wages 5 to 10% of those in Germany. In Poland, Asea Brown Boveri pays workers $2.58 per hour; in Germany they pay $30.33 per hour. Polish workers are also on the job 400 more hours per year than those in Germany. In the special economic zones across the border from Hong Kong, the standard wage for entry-level workers in the metalworking trades is $35 per month. The work month is 29 days, and each working day 11 hours long a net wage rate of 11 cents per hour. 2
Growing productivity in global labor pools will continually cause jobs at higher skill levels to become commodities that shift to developing regions. This will require developed economies to continually move their general workforces up the skill ladder to obtain growth in individual quality of life and sustained company and community health with increased security for all. Global competition requires developed regions to leverage their human resource strengths and the technology pull of lead users to compete based on innovation combined with continued high quality and productivity. Making fundamental workforce adjustments is key to getting to and thriving at the next level of global manufacturing. It takes a network of organizations continuously innovating, and introducing products and processes through the synthesis of diverse local expertise and products. Globalization increases the complexity of the task of increasing U.S. productivity. As a result, superior integration of the entire workforce of the extended enterprise is becoming more important than control of materials and other traditional assets was in the recent past.
Productivity Productivity isnt everything, but in the long run it is almost everything. A countrys ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker. Compared with problems of slow productivity growth, all our other longterm economic concerns foreign competition, eroding industrial base, lagging technology, deteriorating infrastructure, and so on are minor issues. Or, more accurately, they matter only to the extent that they have an impact on our productivity.3
2 3
Thurow, Lester. The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World, Morrow & Co., 1995, p.168. Krugman, Paul. The Age of Diminished Expectations: U.S. Economic Policy in the 1990 s, MIT Press, 1990, pp 13-18.
1.4 New Directions, New Obstacles Require New Skills The paradoxical nature of these individual/company core capabilities can pose severe challenges to company leadership, because failure to identify and manage core rigidities can hamper performance, compromising the company's future. This is compounded when a leader's power base is centered in what may be a core rigidity. To manage this, all that is essential are courage, persistence, and openness to learning, creativity, and hard, loyal, high-risk/highreward work both at the personal and organizational levels. Toward the Future The forces described above highlight needs for a flexible workforce and workplace. The combination of these forces require a workforce that continually exhibits leadership capabilities in the areas of: Discretionary effort and workforce innovation Lifelong learning Shared leadership: teaming and partnering Partnership between the individual, company, and community.
Core Capabilities/Core Rigidities Corporate knowledge is wrapped up in what is now called Core Capabilities fundamental knowledge and organizational resources required to advance a product or service. Core capabilities in the best companies grow stronger with each major development project and other reaction to their environment. Knowledge begets more knowledge, and skills more skills. Further, because a company becomes known for its particular strengths, it attracts the best people in those disciplines. This cycle supports itself; a company's core capabilities tend to dominate product and process development projects. However, we take a hard look at the concept of core capabilities and expose a perspective often overlooked. Few companies recognize that their basic strengths can have dysfunctional effects. Because new development projects represent a firm's response to market changes, they are the focal point for the tension between innovation and organizational status quo. The same capabilities that are a construed strength also comprise a vulnerability. A company's strength its core capabilities drive successful operations. However, these same attributes, if not properly aligned, can constrain its progress; they become rigidities. The pursuit of development projects and other forms of change, in turn, can improve or renew a company's capabilities, and even initiate new ones. The cycle feeds on itself and thus must be consciously managed for the best results. This also applies to the individual. People in charge of their own careers must constantly be aware of their core capabilities and emerging core rigidities. 4
Each of these elements add to workforce/ workplace performance, and respond to the emerging needs. All will be facilitated by the next generation of social contracts between the individual and his or her workplace.
Bowen, et. al., The Perpetual Enterprise Machine: Seven Keys to Corporate Renewal Through Successful Product and Process Development, Oxford University Press, 1994, pp. 27-28.
2.0 CHARACTERISTICS OF THE NEXT-GENERATION WORKFORCE Discretionary effort, innovation, lifelong learning, teaming, and partnerships are all familiar words, but they need to be taken to the next step with the same rigor, energy, discipline, structure, and commitment that moved quality and productivity from common everyday words to a new excellence in manufacturing, through Total Quality Management (TQM) and lean manufacturing. Likewise, our image of the workforce must be expanded to include all people in the enterprise. The future workforce cannot be the segmented body that exists today. It must be an integrated body where everyone is both labor and management; provides both knowledge and leadership; is both a leader and a follower; and is responsible for both productivity and innovation. All are owners responsible for providing the products, services, and results that satisfy the enterprises stakeholders, and in so doing all share in the rewards and risks that result from meeting customer and stakeholder needs. Business processes and technological and organizational innovations must be approached as systemic changes. In NGM companies, adoption of new workplace conditions will be accomplished by human resource policies that strengthen security, pride of work, and discretionary effort. What is not widely appreciated is that these new innovations impose massive leadership requirements on corporate executives to share power. This is the legitimate use of the concept of politics in the workplace. It is about the amount and use of influence (power/politics) in the workplace and represents a huge change for most traditional managers and leaders. 2.1 Discretionary Effort and Workforce Innovation 2.1.1 Discretionary Effort Discretionary effort is the effort that a motivated individual contributes beyond the minimum required just to do a job. The struggle is to create a work environment that nurtures a deep level of commitment that is not based on old operating assumptions. The workforce of a leading-edge company will be an extremely interdependent and committed group by any current standard. Everything required of the world-class workforce of the near future points to a level of employee commitment and dedication that far exceeds anything generally practiced today. This concept of discretionary effort is a cornerstone of the NGM vision. There are examples of individuals (and more importantly, teams of people) who are orders of magnitude better than their peers and one cannot differentiate between them unless one sees them at work. Whatever their differences, all the examples seem to include massive infusions of discretionary effort. This is like Marine Corps fire teams, platoons, and companies that are vastly superior under fire than others outwardly exactly like them. A more universally understood example may be the 1996 championship Chicago Bulls, who broke the NBA record for most wins in a season despite having what most experts agreed was on paper a less than dominating team. Discretionary effort is that something extra that can provide an individual or team with the championship ring. Unfortunately, in many work situations discretionary effort is only marginally applied at best. Based on a survey conducted by Lyle Spencer, about 44 % of those responding say they do the absolute minimum required. Only about 19% say they give about the maximum they can give certainly not the type of statistics of championship teams. But just as in athletics, we are also aware of highly productive companies, tiger teams, and perhaps some cultures, where people are simply excited about their work and are out-producing their competitors. This type of discretionary effort will be the norm in NGM enterprises. On the positive side, some 76% of the respondents said they would be willing to give more discretionary effort if they or their organizations were provided with stronger vision and leadership.5
Spencer, Lyle M. Jr. Reengineering Human Resources, J. Wiley, 1996, p. 198.
2.1.2 Discretionary Leadership Managing an extended NGM enterprise that fosters discretionary effort will require great leadership at all levels, from the smallest temporary team, through foremen and staffs, to the top of the house. The NGM workplace will create real worth for all stakeholders. It will ensure dignity for everyone and redistribute reDiscrectionary Effort sponsibility. Being successful will require innovative Studies of discretionary effort have asked changes in many attitudes. It is not impossible when American workers to rate the average productivity the attitudes, commitment, and leadership are disof their work groups on a scale of zero no useful work is being done to 100+%, where 100% played by everyone. Discretionary effort is a team is the most employees could do on a sustained sport where the members leverage each others basis if highly motivated. Employees rate the leadership and extra effort. These innovative leadership skills are complementary to the skills of running an established set of business processes. They are not a replacement. Many scholars of workforce innovation point out how difficult it is to find these traits encapsulated in one individual or staff, but we must learn how to accommodate both paradoxical attitudinal and skill sets.
minimum required to get by, just enough to keep their jobs, at about 50% productivity and the most they could give if truly motivated at 95% productivity. The distance between the minimum required to get by and the most an employee has to give is defined as discretionary effort. 6
The modern leader/manager is required to be able to reflect and philosophize to a degree that sometimes astonishes (and infuriates) the down-to-earth, no-nonsense, let's-get-on-withit sorts of men and women who have traditionally held these jobs. The job has become more intellectual and scholarly, in the best sense of these words. It requires an ability to work with theory, interpret research results, identify and reconsider underlying assumptions, communicate at length with others both inside and outside the organization (as opposed to just being briefed), read critically, and write forcefully and concisely. All this is a direct though not often mentioned expression of the information age.7 The total NGM workforce will have to embody these qualities. The full workforce will have to become comfortable with the situation transitory (reciprocal) nature of their power and influence. Leader/follower norms will become increasingly fluid. Requirements include: 1. Better leadership 5. Increased emphasis on teamwork 2. Better people skills 6. Shared authority/reciprocal power 3. More accountability 7. Greater emphasis on individuality, autonomy 4. More involvement of the whole person 8. More dynamic stress.8 Effective foremanship requires a combination of attitudes of eliteness and alert concern with grubby tasks. These attitudes are antithetical in a traditional society (or company), and an individual attempting to combine them is likely to be so conflicted within himself that he is not able to function with high efficiency.9 The roles and responsibilities of the effective factory foreman might best illustrate the type of general leadership responsibilities all must understand and practice in order to maximize theirs and others discretionary effort. In these times of rapid and relentless challenge and change, operating a factory efficiently, in control and at a profit while coordinating with all other appropriate stakeholders, is extremely difficult. An ideal foreman is the balance-point between controlled production and innovation that requires unusual leadership qualities. This type of foreman is hard to find but they are not rare. Just like the best sergeants in the military, top
6 7
ibid. Vaill, Peter. Managing as a Performing Art: New Ideas for a World of Chaotic Change, Jossey-Bass, 1989, pp. 21,22. 8 ibid. 9 Hagen, Everett. The Economics of Development, Irwin, 1968, pp. 92-93.
foremen are indispensable in their units. These are the pressures that more and more knowledge workers must learn to tolerate and eventually to thrive under. Foreman are the immediate supervisors of ongoing, profit-making operations. At the same time they must replace the old with the new. They must supervise moving from established core capabilities (and worrisome rigidities) to new and risky ideas. These are not the theoretical concepts of corporate planners or academic scholars. If things do not work as planned, it is the thumbs of their people who are smashed their Christmas bonus checks are missing. Innovation is very personal at this level. The foreman is responsible for directing the workers to perform the tasks assigned. But the foreman is also a coach, a crisis solver, and a helper, expected to know more about the technical problems of the domain and their solutions than anyone else. They know each worker's job, usually better than the worker, and through this knowledge, help each member of the team accomplish production. On occasion they are spare laborers, pitching in to help clear bottlenecks. On the most personal level, many innovations will threaten to strip foremen of the unique capabilities that make them such star performers. With workforce innovation, many of a foreman's core capabilities become core rigidities. At this level, the foreman is being asked to undermine his/her own hard-won status and even his/her own job security. However, foremen also have the authority and responsibility to direct a group of subordinates. They are on the fringe of becoming elite a member of management. The inherent balancing act of the foreman may be traditional, but it is also thoroughly modern. As the role of knowledge workers increases, all of the NGM workforces will feel the pressures of traditional foremen at every level, up to CEO. This bond of commonness is key to a sense of team, which is key to fostering discretionary effort. The requirements for increased discretionary effort will also require more high-quality thinking, understanding, wise actions, and empathy for others in the extended enterprise than ever before. This cannot be done without an unprecedented amount of trust and a sense of personal/professional security. This all must be accomplished in a time when trust and job/career security among much of the workforce is very fragile. 2.1.3 Trust Trust is an elusive concept in any relationship, but it is absolutely essential in the NGM workplace. We know it when we see it, but are often hard put to understand why it is absent from a situation. One of the problems is that we tend to think of it as a noun rather than a verb. That is, we think of it as a substance, a thing, rather than as a process. Trust is evoked and cannot easily be stored; it has to be recreated every moment. To capture this process nature of trust, it is perhaps better to think of it as trust ing rather than trust. Smith and Berg have identified the problem of trust as one of the central paradoxes of modern business: Group life is filled with dilemmas in which one needs to trust others but where the development of trust depends on trust already existing. Before we are willing to trust others, we want to know how they will respond to us, not just at the level of acceptance or rejection but with respect to our weak parts as well as our strong ones, our fears as well as our hopes, our ugliness as well as our beauty. In order to discover how others will respond, someone in a group must be willing to expose his or her weak, fearful, and ugly sides.10 The trust involved in political action and change of business processes have similar origins. Both build from the creative impulses of individuals and groups: from their aspirations to achieve something unique and uniquely satisfying, to realize in practice a vision of the way things should work. In that sense, both political action and innovation are intensely personal. However, neither can survive in a vacuum; they must ultimately find some connection to broader notions of a collective action and collective good. By today's standards, the NGM workplace must exhibit extraordinary levels of trust.
10
Smith K. and Berg, N. Paradoxes of Group Life, Jossey-Bass, 1987, pp. 115.
Trust exists within a work unit, corporate culture, and larger ethnic, national, or religious web. In U.S. companies there is a unique paradoxical nature to all of this. Briefly, Americans the society at large and therefore the workforce exemplify both individualism and communalism. From one perspective, the workforce is highly individualistic; from another, it is highly communal, drawing from ethnic, religious, and regional heritage. Fukuyama calls this seemingly paradoxical mix Rugged Comforminist. His thesis is that this traditional foundation of trust, established over the history of the country and flowering into the industrial might of the past 50 years, is now in a state of crisis. What was once a significant advantage is now in question.11 2.1.4 Paradoxes of Workforce Innovation Discretionary effort is essential during any time of change but particularly given the kinds of systems-wide innovation required for manufacturing enterprises striving to face the increasingly stressful challenges of the current environment. The discretionary effort in the environment of the workplace strongly influences the process. The need for speed and innovation requires companies to use and reward the creativity, knowledge, and leadership effort of all its employees. This must occur in all aspects of the business, from developing products and providing services to establishing new business practices and managing the complexities of a global enterprise. Just as importantly, it must also happen at the individual level within a person in the workforce working in the workplace. To innovate is to do something that has never been done before to initiate a new order of things, to quote Machiavelli. This is difficult and hazardous. Changing people's customs is an even more delicate responsibility than surgery.13
Innovation An innovation is an idea, practice or object perceived as new by an individual or other unit for adoption. It matters little, so far as human behavior is concerned, whether or not an idea is objectively new as measured by the lapse of time since its first use or discovery. The perceived newness of the idea to the individual determines his or her reaction to it. If the idea seems new to the individual, it is an innovation. 12
Workforce innovation, involves change and change almost always involves resistance. There is resistance because innovation (change) brings with it uncertainty and therefore anxiety. We have experienced change efforts that have gone bad when things have not come out as expected. As adults we don't like failure. Leadership, at all levels and broadly defined, trust, and the discretionary effort required of individuals in successful change management is the center of these considerations. Change is seldom easy or straightforward. Probably the most important difference between innovative and operational leadership lies in security the handling of risks. There are at least two types of risks involved: the risks of something really going wrong in the operational world, and the emotional risk of being criticized, feeling foolish, or being responsible for unintended consequences. In innovative phases the quality of problem-solving, communications, and teamwork must be at an even higher order than during routine operations. Once again, discretionary efforts of the workforce must be extraordinary, by today's standards. All of these issues are intertwined in the multi-layered challenges of NGM workforce flexibility. It is very difficult to launch and implement a major, systematic workforce innovation. But it is also very practical. Operational leaders have much to offer in a successful systems change campaign. Innovation involves two steps: 1) arriving at a new conception, and 2) converting it into action or into material form. There is no such thing as innovation in the abstract. Innovation is always innovation in some specific field, involving some specific material or concept, or relationships of some sort to other persons. Some types of innovation involve overcoming resistance by other person; others do not. Some involve managing a
11 12
Fukuyama, Francis. Trust: The Social Virtues and the Creation of Prosperity, Free Press, 1995, pp. 283-294. Rogers, Everett. Diffusion of Innovations, (Third Edition) Free Press, 1983, p. 1. 13 Spicer, Edward. Human Problems and Technological Change. Russell Sage Foundation, 1952.
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large organization; others work in isolation. Some have an aura of learned or sacred activity; others of practical work.14 Probably the most demanding task is to sustain commitment to the innovative initiative over the extended period it takes to get the change internalized and operational. It always seems to take longer and cost more than expected. It is almost a rule of thumb that the champions of the innovation have to be more optimistic about the process than they would like in order to market the idea to corporate decisionmakers. As problems, dilemmas, and crises mount, the cynics, skeptics, and guardians of the status quo get their additional days in court.
Pre-Columbian Wheels It is important to remember that there is no workforce innovation in manufacturing without both phases (concept and implementation). Remember the wheeled toys of pre-Columbian America. It is interesting to speculate how those great cultures would have fared if they had been able to translate those toys into the worksaving, fundamental technologies they were elsewhere in the world. I always wondered did the inventors of the wheeled toys try mightily, maybe for generations, to sell and implement the bigger concept of the wheel? How did the forces of the status quo keep such an obviously brilliant innovation from being exploited?
There are very legitimate reasons to resist change, particularly large, systems-level interventions during a time of perceived safety/limited threat. A great many new ideas are not the solution they are touted to be. This legitimate resistance grows in two ways: 1) tacit resistance ferments and appears through such things as benign neglect, cynicism of program-of-the-month efforts, etc.; and 2) more overt resistance grows out of un-intended consequences, overlooked issues, and other mistakes that surface during implementation. There is a major paradox at the root of workforce innovation in a manufacturing firm striving to move to the next level. At the time when the need to innovate is widely recognized, there are, paradoxically, massive pressures to efficiently manage established routines. Innovation is manageable, providing people have the right understanding and skills; however, these skills are essentially different from those most valued in more routine operations. Innovation skills are centered on the art of managing risk and uncertainty. Above all, trust and a sense of security are essential. Figure 2.1.4-1 is illustrative of a generic successful innovation cycle.
Optimism Champions Kick-Off Speech Attack of Assassins
Time Delays General Perception of the Innovation Results are Not Visible
Operationally Routine
Existing Operations Suffering Start to See Results
Permission to Develop
Pessimism
Conception Phase Time

Weeks
Implementation Begins
Months
Innovators Valley of Doubt

Years
(Timeframe long enough for career assignments to change. It takes courage to stay with the vision and persevere through this typical topography of a successful innovation.)
Figure 2.1.4-1. The Topography of an Innovation

14
Hagen, Everett. On The Theory of Social Change: How Economies Start to Grow, Irwin, 1962, p. 87.
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This is a conceptual 'map' of organizational energy during any adoption of a major innovation. The way innovation is handled is critical in retaining enthusiasm and commitment, and in overcoming the inevitable problems, failures, and embarrassments that arise.15 All of these characteristics are traits of the highly motivated. They simply cannot be accomplished without discretionary effort. Thus, the beginning of wisdom is to anticipate opposition. An innovation needs a champion to nurture it, and any new technology capable of inspiring strong advocacy will also provoke opposition. Where there are product champions, there will also be innovation assassins, who can fell a project with just one well-aimed bullet. Champions thus need to marshal forces and nurture support to implement new practices, process, or technologies in the face of resistance. The most common reasons for opposition to change are fear of the loss of skills or power and absence of apparent personal benefit.16 The importance of discretionary effort and innovation is difficult to overstate. Global competition requires developed regions to leverage their human asset strengths and the technology pull of lead users to compete based on innovation driven by the continued creative, sustained discretionary effort of the workforce. The enterprise is dependent on the total workforce as its source of innovation. 2.2 Lifelong Learning Lifelong learning is at the heart of workforce and workplace flexibility. New knowledge and new skills allow both the workforce and the workplace to be more flexible. Paradoxically, it is also the flexibility of the workforce and the workplace that facilitates and accelerates the enterprise. This learning/flexibility interdependence is enhanced when the NGM Enterprise recognizes and supports four essential aspects of learning: 1. 2. 3. 4. Continuous individual learning Creating a learning environment Transferring learning Enterprise learning.
It is clear that NGM enterprises will be extraordinary learning-focused organizations by today's standards. The total enterprise chain will have to be filled with people who are learning, individually and as groups. The combination of new technologies, new customer needs, and global economics will result in individual skills obsolescence approaching 20% per year. To allow for this, and to respond to continuous change, individuals must become engaged in lifelong learning. Individuals may need to invest as much as a month per year in education and training to remain at the edge of their trades or disciplines. The individual, companies, and the larger community collectively share this responsibility, but individuals must supply for themselves what companies do not provide. Workforce/workplace flexibility will require not only the resources, but also the environment to support that level of education. Individuals will need to be rewarded for learning as well as doing their job. They will also need to be encouraged and supported to take the risks associated with such learning. Creating a Learning Environment At a personal level, learning often requires jumping S-Curves, which is generally very frightening. It is very difficult to let go, to shelve one's hard-earned personal competencies which have served so well and have to depend on the atrophied learning skills we all once had in abundance. However, successful lifelong learning depends on more than just the education. It also depends on providing a learning environment where experimentation and risk-taking are encouraged. The following set of observations establish the basis for what we know about adult learning processes. They are often maddeningly paradoxical.
15 16
Adapted from Hagen (1962), Leonard-Barton, Kraus (1985), and Nolan (1989). Leonard-Barton, William Kraus. Implementing New Technology, Harvard Business Review, Nov.-Dec. 1985, p. 109.
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The best learners on earth are the very young, in part because they are eager, fresh, enthusiastic, etc. To a large measure their relatively explosive learning rates are due to their almost complete lack of ego, fear of failure, and utter disregard for temporary defeats. They are primitive, natural, innocent learners. They don't make things too detailed and complex too quickly. In a study of 92 British innovators that were very influential during the 17th and 18th Centuries, Everett Hagen identified the following characteristics. They were motivated by inquisitiveness, curiosity about their environment, lack of inhibitions against change and an unrelenting drive to achieve. They were generally men of adequate means for whom economic motivations were plainly not paramount.17 These champions of the industrial revolution appear to be like typical 2-year-olds! The learning that ensures workforce flexibility can be facilitated by a workplace that creates the environment that encourages inquisitiveness, support risk-taking by minimizing the insecurity generated by failures. Transferring Learning Workforce/workplace flexibility is enhanced when an individuals new learning is transferred to others. This requires that the individual and the workplace are sensitive to how the new learning will be received. In the traditional manufacturing company, we also send our best off for training, off to set up a new business, etc. to come up with a new approach/paradigm. At some levels companies honor these anointed ones with rewards and support through executive eduThe Leadership Paradox cation programs or promoProgress in leadership effectiveness is difficult to measure by any standards, tions, but paradoxically, let alone with traditional metrics designed for other times and challenges. companies also often But we are not alone. Our paradoxes are not as new as we may think. punish them for dropping There are numerous examples from which to draw and adapt other industries, their Dhoty. cultures, and history. Many outside of industry can add to our insight and Companies often ask the very people they are most relying on for leadership and bringing back new knowledge in these frightening and chaotic times to commit anti-social acts (within their traditional corporate culture) thereby maiming their own, as well as other's best efforts. All of this impacts the very fabric of the enterprise.
understanding of some of what we face. As one story goes: Farmers from a particularly impoverished section of Bangladesh were struggling to adapt to the modern agricultural system. They selected and sent some of the most progressive among them to the capital to learn the mysteries of the international credit and commodity systems. The newly trained farmers returned technically confident but naive as leaders. They were immediately defeated as effective change agents rejected by their peers without ever getting to say a word, even as they jumped from the bus because they were not ready for the leadership paradox they faced. Farmers in the subcontinent traditionally wear their pants rolled and bloused high on the thigh (in a fashion known as a Dhoty). If one unrolls his pant legs drops his Dhoty he is instantly wearing what is universally recognized as long trousers. This seems practical enough, but is symbolic of much more. For the farmers awaiting their returning leaders/friends, it was obvious from as far as the eye could see that their friends, soul mates in poverty, trusted colleagues the best their community had to offer had sold out. By returning with their Dhoty dropped they had adopted the garb of the farmer's historic oppressors the long-trousered colonial imperialists and their citified lackeys. Just a glance by these traditional followers told all who had eyes to see that the newly trained had joined THEM. On the other hand, the new leaders were not prepared to take the heat to bridge the gap created by the changes they themselves initiated as leaders.
There is also an element of hope in every enterprise because there is almost always a leadership cadre that can establish new business processes. They can be called outliers. While part of the enterprise, these individuals are often not viewed (nor do they see themselves) as part of the mainstream corporate culture. Because they don't quite fit, they are less culturally constrained than the more entrenched. During times of rapid, massive change they can master the waves of paradoxes between what was and what can be.
17
Hagen 1962, pp. 297-30.
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Because they are outliers, they feel comfortable with change and are generally not afraid to commit offenses against what is considered politically correct in the corporate environment. Successful leaders in such environments act as the key link for balancing of their traditions, on the one hand, and understanding, adapting, and accepting the new paradigm on the other. These transitional leaders interpret for the rest of the relatively more confused and frightened population, identify major issues and priorities, create a favorable atmosphere, and propose plausible strategies for reaching common goals. Tying back to the tale above, such leaders would be able to jump off the bus with their Dhoty in any position and deal with the accompanying paradoxes because they already would have done it on a personal level. With this personal mastery of the paradoxes comes leadership, vision, a willingness to be critical and creative, and in general an ability to affect the activities that facilitate change toward a successfully adapting enterprise. The next generation of enterprises will be very efficient instruments for adaptation and continuous adult learning. They will be both proactive and ever-responsive. The workplace must not only be a place where there is an opportunity to learn; it must be an environment that supports learning and change. Applying Learning to the Extended Community The goal of the NGM Enterprise is to become a wise enterprise an enterprise that is acutely aware of external and internal forces and shows sound judgment in responding to them. Ultimately, the NGM Enterprise cannot long thrive without a healthy extended environment. Leaders will encourage the broad accumulation of knowledge. There will be tight coupling of community skills and the interfaces among them. There is a return-loop nature about education and the acquisition of knowledge; the workforce is not a self-perpetuating element that can be isolated for long periods. Companies cannot become blinded through listening to their customers or outdistancing their competition. In the long run, they must be a strong, positive influence on their extended community, and thereby lift the standards for all. 2.3 Teaming and Partnering: Shared Leadership Throughout this paper, teaming and partnering are terms broadly used to mean shared leadership. Simple definitions are used here: teaming is shared power and responsibility in a small group; partnering is teaming in larger groups and organizations. Sharing power is undoubtedly one of the most difficult things for those with power to do, but heightened competition requires that power and influence be shared for better responsiveness and performance. NGM enterprises will find ways to thrive in these conditions. Individuals within workforces will share power in ways unheard of by today's standards; within small teams, task forces, and other groups; between corporations and institutions; and across borders and cultures. The trusting process will always be nurtured. Teaming, partnering, and other group participatory activities are central to the NGM concept but they are generally not well-understood. Much is written about global enterprises involving workforces and workplaces from very different cultures and political/legal/economic environments. The very terms (teaming, participation, partnerships), have different and sometimes contradictory meanings in different settings. In a knowledge-worker-dominated workforce there is great significance in participation. It increases the control of individual employees over their own lives and provides an outlet for their creative talents, thereby elevating individual dignity and self-respect. This all has to be accomplished within an inclusive, productive, workplace. There are other good reasons to believe that enterprises that make better use of their human assets will develop a competitive edge in the fierce struggle for international markets. Small-group activities allow individual workers to share their knowledge and skills, and develop them in ways that enhance economic success. This helps not only to ensure the enterprises success, but to enhance employment security as well. Teaming and Partnering Teams will be the primary building blocks of NGM enterprises. They will be driven by competition and requirements for performance not just advanced for their own sake. Giving up familiar lines of power is too difficult to expect of traditional managers without serious prodding by the global marketplace. Balanced re-
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sults that benefit customers, employees, and other major stakeholders will continue to generate the competitive pull that gives rise to teams. NGM teamwork will include factors such as synergy, group creativity, collaboration, and learning that are not often found in temporary task forces. The teams add value greater that the same set of individual contributors. In the NGM context, teams create ideas and products that no individual could reach alone. Teams learn at a greater rate than individual study. Partnering is the skill of having the same level of synergy and collaboration between larger groups. Teams can deliver performance that enriches and sustains the company's overall performance ethic. This reinforcing cycle of performance and teams, and teams and performance, will characterize tomorrow's winners. To build such strengths, many companies must manage through a period of major change that depends on people throughout the company becoming very good at things they are not good at today. Teams will help direct, energize, and integrate such broad-based changes in behavior. They will set performance aspirations, intensify focus and commitment, energize workforces, build core skills, and spread knowledge to those who need it the most to perform. Such transformations will often be led by a team at the top. Building team performance at the top, however, is more difficult than anywhere else. Senior management groups find it hard to establish a team purpose, goals, and work products for which they can hold themselves accountable as a team. Absent these, such groups ought to exploit the working group option. Nothing is more corrosive to a company's performance ethic than a pseudo-team at the top. The primary role of top management is to focus on performance and the teams that deliver it. Top leaders increasingly recognize that teams improve individual performance, energize hierarchy and structure, and enhance basic management processes. By finding the teams that matter, and then supporting them as they reach for performance, top management can help spawn the teams that will lead their companies to high performance. The wisdom of teams lies not in encouraging teams for their own sake, but rather in helping those on potential teams have the chance to pursue their own performance challenges.18 The requirements for teams and partnerships can be traced to four major dynamics: 1. Exchange of Purpose. Each party has to struggle with defining purpose, and then engage in dialogue with the others about what is being attempted. 2. The Right to Say No. Saying no is the fundamental way people have of differentiating themselves. To take away the right to say no is to claim sovereignty over a person. 3. Joint Accountability. Each person is responsible for outcomes and the current situation. There is no one else to blame. The outcomes and quality of cooperation within a unit are everyone's responsibility. 4. Absolute Honesty. This sounds obvious, but is difficult in practice. In a partnership, not telling the whole truth to each other party is an act of betrayal. One of the benefits of redistributing power toward more reciprocal relationships is that people feel less vulnerable and are more honest.19 Shared Power: Operational Leadership/Followership Distinctions between leaders and followers in the NGM workforce are less clear. In traditional corporate settings, there are divisions associated with leadership, management, salary, wage, etc. In the future, all workers must exhibit knowledge and leadership. Therefore any distinction is artificial and arbitrary at this level of analysis. Most of this discussion of leadership applies to all members of an NGM workforce. Demands on strong leaders in a rapidly evolving business are very high. Established values and processes feel fragile and ineffective. Managers feel that followers no longer follow in the way they once did. Knowledgeable colleagues and trusted advisors differ widely in their definitions of the issues, strategies, and their approach to implementing change.
18 19
Katzenbach & Smith. The Wisdom of Teams: Creating the High-Performance Organization , 1993, pp. 173-74. Block, Peter. Stewardship: Choosing Service Over Self-Interest, Berrett-Koehler, 1993, pp. 29-31.
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Leadership depends on the norms of followership. Much of what is written in the popular press is really about the changing norms of the followers not the leaders; corporate culture, changing workforce, the international web of very local perspectives...but it is not written that way, as follower-ship. The rules of followership are very different by both setting and circumstance. Real teaming is based on new standards of relatively equal relationships (shared power). Usually it begins with some kind of teambuilding activity. Teambuilding is a good way of creating the kind of communication and behavior desired, but most are surprised at the rigorous effort required. The intent is to do more than improve communication it is to create a balance of power with accountability, demands, and requirements flowing more or less equally in all directions. Models will have to be increasingly based on shared power, consent of all stakeholders and less on raw power. In the NGM Enterprise, the management caste system will quickly evolve into a much more democratic model in which everyone will work and everyone will manage. Few, if any will just define, watch, and measure what is best for others and the firm. Ethics of Inquiry Leaders in the evolving workforce will have new approaches to setting goals. Under the old system, managers and leaders were asked to set and reach goals for themselves and for all the traditional workforce. For several decades, the best corporate leaders and managers have done this admirably. However, a lifetime of setting and achieving goals shapes the individuals with a kind of muscle-bound willpower. They tend to believe that they are masters of their own destiny. It is no surprise, then, that these tendencies are widely applied to the organizations that they lead, and explain our great appetite for techniques, control systems, and results. They represent the ethic of control. Newer forms of leadership are emerging. Their growth was fueled by the Ethic of Inquiry which represents movement toward the innovation side of the Control/Innovation paradox. Each problem they solved created the opportunity to solve the next problem that their last solution created. These leaders displayed the characteristic of not just having the answers but of living in the question. They ask questions not just to solve problems; they altered their relationships with problems to create larger opportunities for themselves and their companies. They develop a view of work that is larger than the limits of a job description. The NGM workplace will nurture a kind of perpetual inquiry that changes the nature of things and often turns them into their opposites. Paradoxes, then, are not just hassles to be dealt with and set aside, but signposts of opportunity. Lurking inside each paradox is a workshop on the nature of manufacturing and a vehicle for personal, enterprise, and community growth. This entails a shift; we need to value the process of inquiry as much as the finding of specific solutions. Peter Drucker expects enterprises of the near future to have about half as many levels of management as are typical today. The Command and Control side of the paradox will have little influence which means that paradox will have been challenged and overcome by NGM Enterprises. The kind of leadership practiced by everyone, from the most junior team member to senior executives, is also getting more complex and conflicting. This is the essence of teaming, and the distinction is important because interdependencies and shared resources require democratic leadership based on trust. We will have to learn how to structure organizations around multiple overlapping networks of teams, instead of simply spinning off ad-hoc teams as needed. The key will be learning how to distribute and share power learning how to build trust more quickly, widely, and deeply than we have ever envisioned as possible.
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2.4 New Partnerships: Individual/Company/Community In the future, the NGM enterprises success will center on an expanded set of reciprocal relationships that allow the best enterprises to balance the paradoxical challenges that increasingly arrive in waves. But the basic units remain: the individual, a company, and the communities within which companies operate. For NGM companies the relationships between these three entities will be vastly different from the present norm, being significantly more fluid and dynamic while being more essential than ever to long-term success. Individual Individuals are the atomic unit below which the workforce cannot be subdivided. Persons, acting in workforces, change their attitudes, then their behaviors and relationships, and finally more formal structures and responsibilities. At its base, the important assets are individual people. It is a paradox that the smallest unit the individual is the most complex element in this web and is also the unit of production. Company/Community Because the workplace has become more turbulent, less predictable, and more like a white-water river, more not less attention needs to be paid to the outside to other elements of the extended enterprise, beyond the traditional company. The pressure to develop a closed-system culture in which outsiders are devalued and scapegoated must be overcome.20 These pressures to hold the outside at bay come from several sources, but they all have to do with risks. On the positive side, they build cohesiveness of the team. These defenses highlight one of the most important values of working in teams. The strength and learning ability of a group far exceeds that of any individual. As any combat veteran knows, to do your share and add value it is essential to draw courage from the team with whom you persevere in spite of the exposure and risk. It is clear that most of these challenges are embodied in the learning process as well. On the negative side, closed systems can retard sharing and improvements. In every case, teams and partnerships will be much more effectively exploited by NGM enterprises than they are today and these partnerships will be much more inclusive. There are at least three major ways that individual, company, and community relationships of the future should be viewed, as discussed below. Tripartite Partnership for Lifelong Learning In this age of flexibility, individuals loyalty must extend beyond his current employer. No longer can they assume that the employer will provide the necessary development and career opportunities that fully satisfy their lifelong needs. They must now also be loyal to their own development to ensure employability and ability to contribute beyond one employer and one career. This demands that individuals take on a new responsibility for their career development. However, this requires that they have access to affordable education and training, which requires a new role for the community. Also, employment security will include having access to jobs outside their current employer. This is another example of how the community becomes a key new member of the new evolving social contract between the individual and the workplace. It is evident that industry and academia must closely integrate their resources to better understand and define the needs of the workforce, and then to deliver the expanded knowledge supply chain in a timely, effective, cost-efficient manner. This is where the community becomes a key partner in the process, by providing a solution to the dilemma through the availability of a larger, integrated knowledge process. As an example, the MassJobs Council Career Center Initiative will consolidate all employment and training services into a state-wide network of career centers. The Council envisions career centers becoming known as the primary places to go whenever an individual faces career preparation or transition decisions, or when employers must address employment or staff training needs.
20
Hirschhorn, Larry. The Workplace Within: Psychodynamics of Organizational Life, MIT Press, 1988, p. 201.
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There are no obvious answers, but thinking in terms of a total, extended community knowledge supply chain will help ensure that all elements, in their own and combined ways, more effectively meet the needs of industry and the individual. Tripartite Partnership for Tribal Values The community within which any global enterprise operates has roots deep within the cultures hosting its productive units. In a sense, modern corporations share assets with all of the communities within which they operate, just as much as some traditional tribal cultures. It is essential to understand the importance of this facet of community as one thinks about the NGM workforce. The outputs of any manufacturing enterprise spring from not only the physical, mental and, organizational production, but also from the deeper infrastructure of the community the tribe. This includes the values, technological base, organizational structure, and communication norms of the population from which the firms workforce is recruited. Success in coming years also depends on a level of cooperation, understanding, and trust that is seldom reached or sustained in todays environment. Making matters more complex, rapid progress must be made in areas where there is little practical industrial experience or solid academic research. Value-chain and supplychain notions are replete with demands for higher levels of cooperation and coordination. It is instructive to think of one of the most persistent of community-goods dilemmas: shared resources and distributed power between individuals, companies, and communities throw enterprises into a paradox commonly labeled as The Tragedy of the Commons: Briefly, in the tragedy of the commons the rational individual gains by harming fellow members of the common, and he loses by benefiting them with a public or collective good. For example, the good herdsman cannot survive in a market economy; if he maintains his soil while his neighbors mine theirs for maximum yields; sooner or later he must either abandon his herd or move outside the market economy. Similarly, while a socially responsible factory owner might wish to control the pollution emanating from his plant, if he does so it is at his own risk and he is at a competitive disadvantage. Industry is beginning to understand that there are more common-pool resource dilemmas than they were able to recognize a relatively short time ago. Not unlike those subsistence-level economic entities (tribes) who manage much of the worlds fisheries or pasturelands, extended manufacturing enterprises will become much more self-organizing, mutually monitoring, intelligent, and have a longer-term view. It seems clear that NGM enterprises will be the ones that understand and adapt to this new sense of the community concept. It will be a competitive advantage. Tripartite Partnership for Global Competitiveness As globalization increases, the health of a corporation is not simply dependent on the health of the U.S. or any other national government. As companies compete as part of extended enterprises, they will increasingly depend on workforce elements outside their own company. In fact, workers in supplier firms will often be part of multiple value chains that compete. All members of next-generation workforces will have to be recognized and treated as equal and empowered partners who operate with a sense of ownership for the enterprise. The organizational requirements for NGM companies will be staggering if the desired combination of behavior is to be delivered by teams involved in the international enterprise chain. This is not a one-way street, however. The larger community the region will increasingly have responsibility to supply the human and other infrastructures to attract industry. As the value of their assets increases, the region will be able to become selective, and will evolve from a sellers to a buyers market. The essential notion is that the community is greater than any single firm or enterprise. The clashes between civilizations (major cultural blocks) contribute to most current political crises, and enterprise workforces are not immune to these tensions. In large multinational enterprises, all of these interlaced requirements must be simultaneously and wisely implemented by a world-wide workforce. Disparate interests and perspectives are potentially conflicting in even the most tightly integrated companies. These
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conflicts are multiplied as other countries, languages, religions, and traditional value systems are added to the enterprise value chain. In each of the preceding sections, the complexity and uncertainty of initiating changes in the workforce has been demonstrated. Because major change is so difficult to implement, to have internalized by both individuals in the workplace and by the structures, procedures and behaviors that make up the culture, a powerful entity is required to sustain the innovation process. Not even a charismatic and powerful CEO is able to develop the appropriate vision, communicate to all the workforce in the extended enterprise chain, neutralize obstacles and innovation assassins, and generate enough examples of short-term success. Building the required high level of trust cannot be done from a distance or through occasional attention. Remember that trust is very perishable and difficult to store away.21 This section focuses on building such a coalition between the individual, the company, and the larger community. The essential underlying value in this extended partnership is trusting. Regardless of the process, the method used to bring these three entities in some sort of political equilibrium is trust ing. What is essential is a strong coalition a champion-of-change coalition. Building such a coalition, at the right level and with the right composition, is an essential part of the process NGM enterprises impact. A major part of the required adjustment for NGM enterprises is establishing the organizational links with their enterprise chain; from the individual to academia, to government, and the wider community. The U.S. has done this rather well in areas such as agriculture, medicine, and defense. In each case there is a well established partnership between private elements of the industry and academic, state, federal, and community interests. An example from agriculture is the national land-grant university/cooperative extension system. Similarly effective links between industry, government, universities and the individuals that comprise the workplace will help U.S. companies contribute to global enterprises. Paradoxically, to the extent these linkages are effective, the enterprises transcend national borders and national, cultural, and tribal parochialism. Examining the Framework As the issues of discretionary effort, lifelong learning, teaming, and relationships between the individual, the company, and the community begin to be developed, the framework within which these ideas are worked needs to be examined. The hub of a manufacturing operation, where the workers and the workforce connects with the means of production and the workplace, is framed by a social contract between workers and the company. The requirement for evolving social contracts between NGM enterprises and their global workforces is stimulated by the need to grow and capitalize on what Francis Fukuyama calls social capital the underlying trust that allows businesses, corporations, value chains, and networks to be self-organizing and relatively spontaneous.22 The NGM Enterprise will depend on the leadership and knowledge contribution of every member of its extended workforce. Knowledge workers must have the license to operate freely and creatively in an open workplace setting. It is much easier for the knowledge worker to accomplish the required continuous innovation in a company, enterprise chain, and larger community that operates with the same assumptions enhancing its social capital. It may be that only those enterprises and communities with a high degree of social capital, facilitated by new social contracts that will be able to create and sustain the flexible workforces, will compete successfully in the rapidly emerging global economy.
21 22
Kotter, John, P. Leading Change. Harvard Business School Press, 1996, pp. 51-52. Fukuyama, pp. 255-266.
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3.0 NEW SOCIAL CONTRACTS The NGM Company is envisioned to be a global competitor that is highly responsive to diverse customer needs, able to draw on a deep and changing base of scientific knowledge and on a highly diverse workforce of capable and motivated individuals and teams that work effectively on projects within and across organizational boundaries. 23 Individual firms face a paradox, however. Just when their need for a flexible and highly engaged workforce is increasing, they find it more difficult to invest in education and training and to provide the long-term security needed to achieve high levels of knowledge, discretionary effort, and commitment from the workforce. This paradox leads some to argue that the implicit social contract that produced mutual benefits for workers and employers in the past has broken down. They point to the long-term stagnation in employee earnings, corporate downsizing and outsourcing of jobs, increased income inequality, and general worker insecurity and anxiety about the future. In response, some corporate leaders argue that worker expectations and union demands for job security and government calls for increased corporate responsibility are incompatible with the realities of today's marketplace. Crafting a new contract that meets the needs and expectations of both the workforce and the enterprise of the future is therefore a critical challenge facing all those who share an interest in these issues. Individual enterprises and workers will not be able to do this alone, however. New mediating institutions within and outside the firm are needed to overcome the natural limits facing individual firms and workers in a world where organizational flexibility and worker mobility are critical to achieving mutual benefits for all stakeholders. This section of the paper discusses the features of the old social contract, and the indicators of and the reasons for its demise, and outlines a number of features of a new contract that would appear to be better suited to the needs of today and tomorrow's firms and employees. Since many of these features are not present in the majority of firms and the labor market today, and many have yet to be tested, a forum is described in which researchers and stakeholders from industry, labor, government, and other institutions can study, experiment, and test these and other ideas in a proactive way. The ultimate goal of such a forum is to create the new partnerships and institutions required to realize the vision of the NGM Enterprise (and comparable organizations in other sectors of the economy) and to enable it to achieve its full potential. 3.1 The Demise of the Old Social Contract The implicit social contract evolved from the New Deal labor and employment policies and the expanding domestic economy of the three decades following World War II. The old contract divided the workforce into two distinct groups: production workers and office workers paid on an hourly basis, and professional salaried workers such as managers, engineers, and technical staff. The former were expected to provide 8 hours work for 8 hours pay. They were paid largely for their physical labor and their ability to execute instructions of managers and supervisors about how to do their jobs. Salaried workers provided the knowledge and information needed to manage the enterprise and design and improve products and processes. For their loyalty to the goals of the corporation and to the decisions of higher management, salaried workers were rewarded with long-term job and financial security and protection from cyclical layoffs. Over this time period, productivity growth of 2% to 3% per year generated corporate profits, real wage growth, better fringe benefits, and reductions in earnings differentials. By emphasizing the importance of comparing wage and benefit levels across competing firms and workers, wages were taken out of competition through the influence of unions in collective bargaining and the personnel practices of non-union firms. Firms were expected to compete on factors other than wages.
23
The Next-Generation Manufacturing Project, Working Draft from Integration Team Chair to the Integration Team, MIT Leaders for Manufacturing Program, 21 November 1995.
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Since the mid-1970s, these relationships have been broken down by the declining performance of the American economy in international markets, a slowdown in both productivity growth and real wages, a steep decline in unionization and collective bargaining coverage, and a decline in the relative wages of lower-level occupations and less educated workers. Global competition, technological innovation, increased pressures from shareholders, and a changing workforce have rendered obsolete may of the principles and practices that guided relationships between employers and employees in prior years. As a result, the past two decades have seen unprecedented change and innovation in American workplaces as employers, workers, and unions introduced new practices better suited to contemporary needs. Total quality management, cross-functional product development and work teams, lean/agile manufacturing practices, contingent compensation systems, employee participation and self-managing work teams, labor-management partnerships, etc. have significantly improved productivity, quality, and customer service in many organizations. Where workers are represented by a union, labor-management partnerships have jointly overseen many of these innovations. Where implemented in a systemic fashion, such innovations have paid off in higher productivity and quality. The reality today, however, is that these innovations are not yet widely diffused across the economy. Recent surveys suggest that about one-third of U.S. establishments have introduced two or more of these workplace innovations. Most of these are of recent vintage and some are not likely to survive over time. Even within companies, learning from the innovations of one establishment or division by others has often been difficult, and diffusion slow. Thus, it is important to examine the rate of diffusion and the barriers to survival that these innovations must overcome. One of the biggest threats to workplace innovation and sustained commitment to problem-solving is fear of layoffs or downsizing. Many of the same organizations that are involving employees in workplace innovations have experienced significant downsizing and restructuring in recent years. In the past, workers have been unwilling to commit their energies to continuous improvement efforts if they associated these practices with reduced job opportunities; however, individual employers can no longer promise long-term employment security in return for loyalty. New information technologies and the decentralization of authority to lower-level employees reduce demand for middle managers. Thus, some new arrangement or set of expectations is needed to replace the old expectation that commitment, teamwork, and loyalty would be rewarded with longterm security and career advancement. Established principles and expectations guiding wage determination and compensation have also broken down. International competition makes it impossible for individual firms or collective bargaining units to take wages out of competition, i.e., to achieve comparable wage/benefit levels among competing firms. This leads employers to be more aggressive in lowering costs at the same time as they seek to treat workers as valued assets. Wages have been held down, work has been outsourced to lower-cost sources wherever possible, and increased resistance to unionization and contract demands has intensified labor-management conflicts, making it difficult for government to enforce labor laws within the doctrines and rules of the game established in prior years. While strikes are less frequent, those that occur tend to be protracted power struggles over basic principles rather than temporary extensions of the collective bargaining process. As a result, real wages have stagnated for most workers even in sectors where productivity is improving. Competition and shareholder pressures dictate that a significant portion of efficiency gains be shared with consumers in the form of lower prices or increased product/service quality and shareholder returns. Moreover, the structure of wages has changed in ways that reward those with the education and skills demanded by changing technologies and work arrangements while severely penalizing the less educated and those without access to new technologies and work systems. Looked at together, therefore, the past two decades have been a period of substantial innovation in organizational practices that improve the work life experiences and outcomes of those directly involved and also a time of economic hardship, insecurity, and psychological stress for many. Thus, the gap between the winners and losers in America's labor markets has increased substantially while productivity, profitability, and the overall economy have recovered. If the vision of the NGM Company is to be achieved and sustained, the interests and outcomes of firms and the workforce need to be brought back into closer alignment. If not, the tensions that now lie under the surface in the workplace are likely to explode in unpredictable ways.
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The problem is that no individual firm has the incentives or the ability to remedy the negative consequences of changes in employment practices and outcomes. However, unless collective action is taken to reverse some of these trends, the efforts of individual firms to achieve and sustain the vision of the NGM Company will be at risk. Thus, we have a classic prisoner's dilemma, or market failure problem, that calls for leadership and coordinated action to construct a social contract that is more responsive to the needs of all the stakeholders of the NGM industry. 3.2 Toward a New Social Contract Innovations in workplace practices in recent years provide a starting point for a new social contract. But they are not enough, nor can they be expected to endure over time in the absence of broader changes in enterprise strategies, labor market institutions, and public policy. While all the features of a new social contract suitable to today's workforce and economy cannot be anticipated fully at this time, the following general principles provide useful starting points. 1. Worker commitment and teamwork for a voice on the job and greater democracy. In the workplace, the new social contract implies an exchange of worker commitment to continuous improvement for a greater voice on the job. Flexibility and teamwork are exchanged for opportunities to be trained and gain experience in more jobs and move to higher-skilled work more quickly than possible in more traditional work systems and job structures. Workplace innovations have been motivated primarily by employer concerns for productivity, quality, and flexibility. While workers also value these goals, a majority of workers also expect to have a voice in issues of immediate concern to them. That is, workers want the agenda for employee voice to include issues such as safety and health, training, benefits, outsourcing, work/family responsibilities, and other concerns in their workplaces. On these issues, a majority of workers want increased influence over who represents them, but want these processes to have the support and cooperation of management. 2. Where unions represent workers, union management partnerships oversee and support workplace problem-solving in return for an expanded role in enterprise governance and decision-making. Joint union-management sponsorship and oversight are essential to success of employee participation and related workplace innovations in unionized settings. While these partnerships take on a variety of forms, their common effects are to expand the domain of union-management discussions to include a variety of strategic issues that in the past were largely the province of management alone. The management process in the future will be one in which power is shared among different stakeholders. Achieving mutual benefits through negotiations, conflict resolution, and problem-solving will therefore become an increasingly important managerial skill. 3. Open information sharing for flexibility to use resources efficiently. While individual enterprises cannot credibly guarantee long-term employment security, sustained commitment to continuous improvement efforts requires open and honest sharing of information on the factors affecting the future of the business, the industry, and employment prospects. This operates at multiple levels. At the workplace it may take the form of discussing the relative costs and benefits of outsourcing work versus changing practices to perform the work more competitively within the firm. At the plant level, it may mean discussing ways to organize a new plant or production line to take full advantage of new technologies and work systems. At the corporate level, it may mean sharing information on the competitive position of the firm and market projections that will affect future investments and job opportunities. 4. Training for employability in return for worker commitment to lifelong learning. If individual firms cannot ensure long-term employment security, pressures will increase to provide training that keeps workers skills up-to-date and competitive in the external labor market. The problem is that individual firms have little incentive to provide this type of general training unless their competitors are making similar investments. Individual workers, business, government, and labor organizations will need to make a coordinated effort to fulfill this feature of the social contract. Workers will need to commit to lifelong learning. The business community will need to commit to investments in training that address both their specific technical and organizational needs and those that are transferable to other organizations. Unions will need to
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negotiate for training investments, jointly monitor training programs to ensure they include transferable skills, and help ensure that competing firms are making similar commitments and investments in training. Government will need to modify labor policies such as unemployment insurance to provide workers the opportunity to use periods of time between jobs to invest in and update their skills. 5. Pension and benefit portability. If individual companies can no longer guarantee long-term employment security, then pensions, health insurance, and other benefits previously associated with long tenure with a single employer will need to become more portable. As above, this will require greater cooperation and coordination among employers and unions and will require a role for the government to overcome the free rider problems that can limit cross-firm cooperation in a competitive market. 6. New mediating institutions. New labor market institutions are needed that enable firms to find and attract employees with needed skills and motivation, and provide employees with the ability to enhance their knowledge, earnings, and long-term security as they move to new opportunities within and across organizations. Unions have historically performed this function for American workers, yet they now represent only about 10% of the private sector workforce. Key questions, therefore, are what forms of worker voice and representation are best suited to the needs of today's workforce, and how might these institutions be created? Can educational institutions, staffing agencies, public employment services, professional societies, industry associations, and community-based networks play useful roles in meeting the needs of workers and employers? 7. Employment policies that encourage and support the new contract. The features of the new social contract outlined above require employment and labor policies that promote adoption and diffusion of innovative policies and partnerships within individual enterprises, and which encourage labor mobility across firms. The changes required represent fundamental departures from current labor and employment laws. Employee participation will need to be endorsed as a basic goal of national policy both because it contributes to the competitiveness of individual enterprises and the national economy, and because it enhances workplace democracy consistent with the aspirations of the contemporary workforce. Labor-management partnerships will need to be encouraged as well as new forms of employee voice in enterprise governance. Labor laws will need updating to reduce conflicts that now frustrate worker efforts to organize unions. Employment policies will need to be modified to support portability of pensions and other benefits and encourage training that reduces the costs of employment transitions. Debates over these public policy issues remain stalemated. Given growing recognition of labor market problems and workforce anxieties, they are likely to become a more visible part of the national politics in the near future. Breaking the stalemate in ways that support efforts to create a social contract that supports the vision of the NGM Company and the interests of the workforce will be a major challenge. 8. Negotiations for mutual gains. Much of the tension that underlies the breakdown of the old social contract lies beneath the surface in workplaces today. The efforts suggested here would bring them to the surface, acknowledge their legitimacy, and deal with them openly and constructively. To do so will require effective use of state-of-the-art techniques in problem-solving, negotiation, and conflict resolution. Dialogue and cooperative effort across traditional interest group boundaries will be even more important as workplace tensions grow in response to an increasingly competitive and fluid business environment. In summary, identifying the features of a new social contract that meets the needs of modern employers and workers will require the collective efforts of all stakeholders that influence organizational policies and employment practices workers, employers, labor leaders, other labor-market and educational institutions, and government policy-makers. The challenge lies in bringing these diverse parties together to learn from current innovations, support diffusion of current best practices, and identify and experiment with new practices and institutions that need to be created. An initiative for doing so is outlined in the following section.
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4.0 ACTION RECOMMENDATIONS Development of the NGM workforce will require considerable change, learning, and experimentation with both new organizational practices and institutional structures and public policies. No individual firm can achieve this vision unless other firms are moving in the same direction. Nor can industry do it alone. It needs the partnership of workers, unions, government policy-makers and administrators, and the research and education community. A forum where such diverse stakeholders can meet and jointly develop such practices is needed. Such a forum would actually be a laboratory for developing workforce and employment concepts. A laboratory and research program as outlined below is an effort to create and support a true partnership among these stakeholders. The goal of the program is to analyze current practices and foster further innovations and experiments that show promise for constructing a social contract in employment that supports movement toward the vision of the NGM Company and addresses the interests and expectations of the workforce. The program would have the following components: 1. Basic data collection on the extent of innovation occurring in U.S. firms and the goals and expectations of the workforce. The purpose of this work would be to track the rate of progress (or lack of it) toward the objectives embedded in the vision and to provide the data needed to model the factors that influence the pace of innovation. 2. Research on innovative practices and organizational forms and their effects on performance outcomes. This work would provide the raw data needed for the different stakeholders to assess the effects of different organizational practices on the goals most important to them. 3. Analysis of patterns of diffusion and learning within and across organizations. One of the biggest theoretical and practical challenges lies in understanding why innovations with demonstrated performance advantages are slow and difficult to diffuse within and across organizations. The diffusion and learning process will be a major focus of this research program. 4. Proactive experimentation with new organizational practices, labor market institutions, and public policies, negotiations, and learning processes. In addition to basic research, the program would actively involve and engage leaders from industry, labor, and government in discussions of these issues and would promote further experimentation and transfer of knowledge and learning. The goal is to create a laboratory where the different stakeholders meet and discuss the implications of research findings for their shared and individual concerns, and use their dialogue to promote further experimentation and more effective diffusion and usage of practices with demonstrated value. The laboratory would also be an experimental site where parties could bring particular problems for discussion, study, negotiation, and resolution. The type of program described here is a radical departure from current modes of university, industry, government, and worker interaction and dialogue. It raises controversial issues by giving voice to tensions that have been ignored and which lie beyond the control of any single organization to address. It calls for parties with diverse interests to interact in ways that lend legitimacy to different points of view and interests. It envisions research that goes beyond the protocols and methods of normal science by calling for experimentation and active involvement in negotiations across traditional boundaries. It calls for leaders of individual firms to become leaders of industry. It anticipates future political debates over these issues and seeks to provide data and an analytical framework for these debates. Achieving the vision of the NGM Company will require reconstructing the social contract between the American workforce and American industry to allow all enterprise stakeholders to prosper. The need for flexibility on the part of firms and the corresponding need for workers to be mobile across tasks, projects, jobs, and employment relationships implies that a collective effort is needed to 1) speed and broaden the diffusion of practices that promote high performance, and 2) experiment with new mediating institutions that promote worker mobility and provide firms with the professional knowledge, skills, and motivation as needed. The Laboratory described here seeks to create a forum for the parties with a stake in these issues to discuss both the current state of affairs and to experiment with new ways to meet these challenges.
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Knowledge Supply Chains

January 1997
Prepared By: The NGM Workforce Issues Thrust Team
CONTRIBUTORS William C. Hanson, Leaders for Manufacturing Program, Massachusetts Institute of Technology, Team Leader & Lead Author Bert Anderson, Hewlett Packard Chris Argyris, Harvard University Doug Braithwaite, Braithwaite & Associates Larry Bruno, Ford Motor Company Stanley Farnhom, SK Williams Company Terry Garland, EMC Corp. Lou Glazer, Michigan Future, Inc. Steve Hamilton, Cornell University Steve Holland, General Motors Charlie Hoover, Brooklyn Polytechnical University Wally Hopp, Northwestern University Gordon Jefferson, GVJ Consulting Karen Keefe, EMC Corp. Pierrette Kelly, Manufacturers Services, Ltd. Jan Klein, Massachusetts Institute of Technology Tom Kochan, Massachusetts Institute of Technology John Larry Baer, Consultant Hau Lee, Stanford University Frank Lynch, Johnson Controls, Inc. Tom Magnanti, Massachusetts Institute of Technology Craig Marks, University of Michigan Steve McConnell, EMC Corp. Al McLaughlin, Lincoln Labs/Massachusetts Institute of Technology Kenneth Preiss, Agility Forum P. Ranganath Nayak, Arthur D. Little Company Leo Reddy, National Coalition for Advanced Manufacturing Jim Rice, Massachusetts Institute of Technology Scot Ruska, Intel Corp. Roger Saillant, Ford Motor Company Hal Salzman, Jobs for the Future Charles Savage, Knowledge Era Enterprises, Inc. Kristin Short, Massachusetts Institute of Technology Herb Shumway, Digital Equipment Corp. John Tobin, Siemens Corp. Fred Traversi, Taco Bell Barry Weeks, RW Consulting, Inc.
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iii
The NGM Framework

Global Drivers
iv

People
The NGM Company

vi

H L M H H H H M L M
H H H H H M L M M H
H L H H H M H H H H
H H H H H M M M H H

* H M M H M M H H H
H * M M
M M * H H
H H M * H
H M M H *
M M H H H
M M H M
H H
H H H
H H H
M - Medium Impact
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H H H M
Impact On
Change Management

H M M H H M L M H H
Global Drivers
Investment/Finance Human Resources Knowledge Supply Information Systems.
Table III on the following page shows the relationship of NGM Imperatives to a typical companys areas of operational strategic focus. As shown in this table, there is a high degree of interdependence between and among these operational strategies. Each NGM Imperative paper has an expanded discussion of these strategies. A company needs to tailor its specific operational strategies and Imperatives for its particular situation.
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Investment/Finance
Technology
X X X X
X X X X X
X X
X X
X X X X X
X X X X X X X X X X
X X X X X
X X X X
X X X
X X X X X X
X X X X X X
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Knowledge Supply
Product Life Cycle
Human Resources
Sourcing/Teaming
Environmental
Innovation
CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 The Concept........................................................................................................................................... 3 1.1 Imperative Definition ....................................................................................................................... 3 1.2 The Knowledge System..................................................................................................................... 3 1.3 Supply Chains: A Proven Process Tool.............................................................................................. 5 1.4 Knowledge Supply Chains: A Logical Next Step ............................................................................... 6 1.5 The Key Partner Is the Individual ..................................................................................................... 8 1.6 A Key New Partnership: Academia and Industry .............................................................................. 9 1.7 Requirements for Knowledge Excellence ........................................................................................... 9 1.8 Partnership for Knowledge Excellence ............................................................................................ 10 2.0 Benefits................................................................................................................................................. 12 2.1 A Pull System Enables Stakeholder Benefits................................................................................. 12 2.2 Specific Benefits.............................................................................................................................. 13 2.2.1 Effective and Efficient Access to Knowledge........................................................................ 13 2.2.2 Increased Return on the Knowledge Investment.................................................................. 14 2.2.3 Improving the Efficiency of the R&D Process .................................................................... 16 2.2.4 Increased Return on Education and Training ...................................................................... 18 2.2.5 Supply Chains Encourage Out-of-the-Box Thinking........................................................ 20 2.2.6 Reduced Waste With TQM and Zero Defects .................................................................... 21 2.2.7 Increased Workforce Flexibility Through the Discretionary Effort of a Secure Workforce .. 22 3.0 Implementing Knowledge Supply Chains ............................................................................................ 24 3.1 Start Small With a Visible Need ..................................................................................................... 24 3.2 Recognize the Knowledge Supply Chain Barriers............................................................................ 25 3.3 Practice the Principles of Supply Chain Management ..................................................................... 26 3.4 Expand as Needed........................................................................................................................... 29 3.5 Develop for the Long Term ............................................................................................................ 29 3.6 Share Best Practices With Other Knowledge Supply Chains ........................................................... 30 3.7 The Importance of Naming and Doing Knowledge Supply Chains.............................................. 31 4.0 Action Plan Recommendations ............................................................................................................ 33 5.0 Sources ................................................................................................................................................. 34 Appendix 1 How Knowledge Supply Chains Enable NGM Attributes..................................................... A-1
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ACRONYMS & ABBREVIATIONS ASTD JACMET JIT KSC LFM MIT NCML PALMS PONC R&D ROI TQM American Society for Training and Development Joint Arizona Center for Manufacturing Education and Training just in time knowledge supply chain Leaders for Manufacturing Massachusetts Institute of Technology National Coalition for Manufacturing Leadership Partnership Advancing the Learning of Mathematics and Science price of non-conformance research and development return on investment Total Quality Management
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EXECUTIVE SUMMARY A Knowledge Supply Chain (KSC) is an integrated process that uses the resources of industry and academia to provide an enterprise with the knowledge and talent needed to run its business in a timely and costefficient manner. Why Is it Important? Knowledge is a key enabler of innovation, productivity, and ability to meet the true needs of customers. The cost of lack of knowledge is prohibitive. It leads to non-competitiveness and eventual failure. Key Concepts Knowledge is something that is sourced. It is a transferable commodity, specified and acquired. Applying supply chain management principles can significantly improve an enterprises knowledge and talent acquisition process. Resulting improvements are: Reduced knowledge shortages Applying supply chain management principles to the enterprises knowledge processes will help ensure continuous availability of the knowledge and talent essential to enterprise operations. Improved productivity of knowledge acquisition KSC practices can dramatically improve the productivity of the knowledge generation and acquisition process. The 20% cost reduction and 50% cycle time reduction achieved by material supply chain concepts are repeatable for knowledge. Whats New? Knowledge as a transferable commodity. This concept applies to both explicit knowledge (books, defined processes, codified information) and the knowledge (experience and learning) embodied in people. Changing the knowledge supply process from a push to a pull system, where the defined needs of the customer provide a unified purpose for the total knowledge process. Academia, as a major supplier of knowledge through research, education, and supply of talent, and the requirement for it to be an integral partner in industrys knowledge supply chains. Adapting the learning of the last 10 years in the material supply process to the knowledge supply process. Knowledge supply chains can be immediately implemented by individual companies working with their knowledge systems. Knowledge supply chains are simply a tool to better integrate the elements that are already engaged in the knowledge-related activities. Action Recommendations Publicize the benefits and practicality of knowledge supply chains. The more companies, communities, and academic institutions develop and use knowledge supply chains, the more they will stimulate and support increased activity in the other recommended action areas. Document best practices of working knowledge supply chains. For each working knowledge supply chain, show the purpose of the chain, the partners in it, and the benefits obtained from practicing supply chain management principles. Best practices should include: Examples that focus on various segments of the total education/workforce matrix (workforce development) Examples that focus on knowledge generation (codified knowledge, R&D) Examples of industry engaging its knowledge sources Examples of industrial and academic partnerships.
Quantify the benefits from education and training and the returns from having needed knowledge available. This research will provide the bottom-line justification for adoption of knowledge supply chains. Quantify the value of knowledge as a tangible asset. This research will promote knowledge supply chains as a way to effectively manage such assets. Apply research from related fields that will expand the effectiveness and efficiency of knowledge supply chains. Related fields include material and technological supply chains, athletic knowledge supply chains, learning organizations, and tacit knowledge and its codification. Disseminate the research findings by implementing a knowledge supply chain validation pilot involving researching organizations and industrial practitioners.
1.0 THE CONCEPT 1.1 Imperative Definition Today, the only remaining sustainable source of competitive advantage is implementation of new knowledge. Lester Thurow The productivity of knowledge is increasingly going to be the determining factor in the competitive position of a country, an industry, a company The only thing that increasingly will matter in national as well as international economics is managements performance in making knowledge productive. Peter Drucker With the emergence of an increasingly global competitive environment, knowledge is increasingly being recognized as the only remaining sustainable resource that can provide competitive advantage. Like the materials used in the manufacture of goods, knowledge is a transferable unit, whose value is enhanced when it satisfies a practical need in a timely, cost-efficient manner. Companies that manage knowledge as a strategic asset will gain a competitive advantage over companies that do not. By applying the same principles of supply chain management that manufacturers have applied to materials over the last decade, companies can manage their knowledge assets to enhance capabilities, productivity, and profitability. The concept of knowledge supply chains is an integrated process that uses the core competencies of industry and academia to provide an enterprise with the information and wisdom it needs to run its business profitably, and to educate and train its employees and associates. Given that a competitive enterprise depends on continuous access to new knowledge, and efficient distribution of that knowledge, a companys knowledge supply chain must leverage the research and knowledge-generation systems of all industrial, academic, and government institutions in its sphere of interest, as well as its own internal systems and processes. 1.2 The Knowledge System Knowledge, like any other commodity, is the output of a system that involves creation, development, distribution, and application. However, given that knowledge is dynamic and involves action, it can not be clearly separated from the creator, the teacher, the learner, or the doer. Innovation occurs when something new is provided, most often stimulated by a customers unfilled need. Innovation, by definition, requires new knowledge, but rarely is that new knowledge itself of value to the end user. More often, it is the application of that new knowledge to existing knowledge that yields a new product or service that benefits the customer. Innovation depends on a knowledge-generation process that discovers, creates, and transforms new ideas and concepts into explicit knowledge that can be transferred to a wide body of knowledge users. These users can then apply that knowledge to the development of new products and services that will benefit customers and other enterprise stakeholders. Productivity results when knowledge, either as codified knowledge or as knowledge embedded in technologies, management practices, or people, is used to produce an existing product or service faster, cheaper, and more reliably. Competitiveness depends on the timely knowledge of how to use a product or service to meet the real needs of the customer. Most often, the ability to identify and specify the real needs of the customer requires an interactive knowledge exchange that integrates the customers tacit and explicit knowledge of their needs with the tacit and explicit knowledge of how the products and services of the supplier can be adapted to meet those needs. The successful application of this focused knowledge transfer provides the supplier with the necessary knowledge to deliver the customized solutions that optimally satisfy the customers needs and desires.
While new knowledge is key, it is the timely application of knowledge by the right user that ensures competitiveness. Given that the future manufacturing enterprise will need to draw on the knowledge-contributing efforts of every member of its extended workforce, the knowledge system must serve the knowledge users with the best knowledge sources and forms of knowledge transfer for each user. Table 1.2-1 simplifies and groups the range of possibilities into major categories. This segmentation is important, to recognize and plan for the various knowledge forms needed so that all members of the enterprise can best benefit from available, necessary knowledge to maximize their contributions. While the sources and forms of knowledge transfer differ based on the needs of the user, all forms use a process that links the original knowledge generator with an ultimate knowledge user. This process needs to be continually improved to ensure competitiveness, which requires that all the steps in it are identified and understood. Unfortunately, the intimate human interactions of this process often prevent us from trying to improve this integrated but definable knowledge complex. Knowledge generation refers to the process that creates or discovers new knowledge (Figure 1.2-1). Formal research is an example of a knowledge-generating process, and the process of sharing and adapting best practices is another effective way to generate new knowledge. Knowledge development makes this new knowledge transferable by developing and expressing it in explicit or codified terms that can be documented and understood by others. Knowledge transfer is the process that distributes the knowledge in a variety of knowledge forms that a user can use to efficiently apply that knowledge. These forms include: documented knowledge available through printed or electronic media; education and training activities; and the embedded knowledge acquired with an individual. Knowledge application is the process that makes knowledge actionable as it is applied to meet a need. Sometimes the explicit knowledge itself is the end product, but more often the new knowledge must be combined with other knowledge and transformed into a product or service. When this knowledge is finally used by the customer, the knowledge process closes the loop by verifying that the end product of that knowledge does satisfy the ultimate customers needs. When the needs are not met, the process re-initiates itself. A specific knowledge process can be initiated by any of the four steps, but the true effectiveness of that knowledge can only be achieved when all the steps act as an integrated complex. Table 1.2-1. Knowledge Sources
Sources of New Knowledge 1. Existing documented/codified knowledge 2. Corporate data bases Forms of Knowledge Transfer Media: books, journals, videos, etc. Education and training programs Corporate reports Visions, missions, strategic plans Customer and supplier surveys The knowledge output of other associates, including new hires Workshops, seminars Tours, site visits Interaction with existing associates Hiring of new talent Access to any of the above forms that ensure that new knowledge developed is available to the knowledge user
3. Observable practices of others
4. The tacit knowledge and skills of others 5. New knowledge developed from formal research and discovery programs
The Knowledge Process
Knowledge Generation
Build Knowledge Base through Research, Adaptation, Discovery, & Experience
Knowledge Need & Use

Implement & Adjust Knowledge to Meet Customers' Needs
Knowledge Development
Transform Raw Knowledge into Codified Principles & Practices
Knowledge Transfer
Produce Documentation & People that Will Facilitate Knowledge Delivery
Figure 1.2-1. The Knowledge Process The efficiency of the process is a function of how well each step is integrated with the others. When the process involves only an individual or a team integrated by a common need, the boundaries between these steps blur, and the knowledge flow appears efficient and seamless. However, given the diversity and quantity of potential knowledge uses and users, most systems lack integration, and the process takes the characteristics of a push system with each step focusing on its individual task as the end product. Unfortunately, this historic pattern of separation has become so well entrenched that it limits partners ability to recognize and capitalize on their interdependencies, even when the pull of a larger unifying need exists. 1.3 Supply Chains: A Proven Process Tool As the economy changes, as competition becomes more global, its no longer company vs. company, but supply chain vs. supply chain. Harold Sirkin, Boston Consulting Group The traditional material supply chain refers to the network of entities through which physical units flow and are transformed as value is added by the successive elements of designers, suppliers, carriers, manufacturing sites, and distribution centers. The supply chain concept is based on the premise that it is the whole that provides the reason, the vision, the larger something that unites and gives purpose, while the individual elements of the chain provide the resources, commitment, and skills to make it happen. The integrated, holistic paradigm allows each segment to operate with full understanding of how their output serves the larger purpose or need. The success of the supply chain results from the powerful scope and focus of the larger vision, with each individual empowered with the information and knowledge needed to succeed and thus able to contribute to the success of the whole. Supply chains shift the emphasis from a push system driven by individual elements driven by their own vision and needs, to a pull system integrated by a larger end objective.
Leading-edge firms now readily accept that properly managed supplier networks are necessary to competitively meet market demands for manufactured products. Raw materials, components, parts, and subassemblies of the right quality, at the right time, for the right price must be brought to factories where they are made into finished goods, and these goods in turn must reach distributors who deliver the goods to retailers who sell them to customers. Driven by practices of Total Quality Management (TQM) and Time Based Management, industry depends on supply chains to dramatically improve the quality and functionality of the final product while significantly reducing the costs and cycle time to deliver that product. Typical benefits of supply chain management discipline include: Reduced total system costs: Reduced total system cycle times: Improved quality: Improved product or service functionality: Greater than 20% Greater than 50% 6-sigma potential Delighted customers.
These benefits represent a conservative set of expected results when a new material supply chain is implemented and operated using the precepts of efficient supply chain management. Management Principles Achieving these benefits requires an operating philosophy that manages all the elements of the process as a continuous, integrated system. The principles of this concept are: 1. Treat the system as a continuous, integrated process. 2. Operate with a set of unifying goals focused on the ultimate customer. 3. Provide benefits for all supply chain partners. 4. Ensure a free flow of information and knowledge across the total supply chain to eliminate the time and ignorance gaps that isolate users and suppliers. 5. Optimize the total process by integrating and using the core competencies of each partner. 6. Measure results against clearly defined needs. 1.4 Knowledge Supply Chains: A Logical Next Step I focused on the very simple notion of acquiring knowledge as a commodity, not unlike the other commodities EMC acquires. Knowing that there is a problem to be solved which requires new knowledge of some sort that must be incorporated quickly into our organization, so that we can add value to it to meet our assigned tasks better, faster, and cheaper, leads us to naturally think about knowledge supply chains just as we do material supply chains. Steve McConnell, EMC Corporation While we intuitively regard the concept of knowledge as something far more reverent, dynamic, and complex than a physical unit of material, the value of knowledge, like any physical resource, is enhanced when it satisfies a practical need in a timely, cost-efficient manner. Figure 1.4-1 compares the steps of the material supply chain with the steps of the knowledge supply chain. Note the striking similarities between the two processes. Both require the steps of generation, development, transfer, and use. Both move from a concept to a final utility by adding value to the unit as it moves through the process. Both require a critical element of transformation that converts the concept into a state that can be used by the end consumer. Both are dependent on a rich, efficient, continuous flow of information and knowledge among all the value adders of the process. Finally, both processes typically involve elements that extend beyond any one group or institution.
Material Supply Chain

Concept Usable Product
Product Creation
Product Development
Material Sourcing
Product Assembly
Product Distribution
Product Use
Continuous Flow of Information & Knowledge ENGINEERING MANUFACTURING CUSTOMER
Knowledge Supply Chain

Concept Transfering Knowledge Documentation & People Usable Knowledge
Creating or Discovering New Knowledge
Making Knowledge Transferable Tacit to Explicit
Applying Knowledge
Continuous Flow of Information & Knowledge RESEARCH TEACHING USER
Figure 1.4-1. Material and knowledge supply chains employ similar processes to achieve similar goals. These similarities raise the possibility that the knowledge process can be enhanced when it too is governed by the principles of supply chain management. For example, when: 1. The knowledge process is treated as an integrated system where all tiers of potential knowledge partners are identified and included in the process. 2. All partners know what need the knowledge is trying to satisfy, what specifications and form define the knowledge transfer, who the ultimate customer is, and when they need to use that knowledge. 3. There is an open flow of communication and information among all partners, so that each partner has all the information and specifications needed to maximize the value added to the process. 4. There is quick feedback between each knowledge supplier and user on the efficiency and effectiveness of their knowledge exchange. 5. Each partner in the process feels that his involvement benefits both the total system and him as an individual, and each partner recognizes how and why he is a necessary, valued member of the larger process. These principles apply to whatever form of knowledge the customer acquires, be it: Existing, codified knowledge located in an established knowledge base such as a library, Web site, or company database New skills, learning, and development through formal education and training Embedded knowledge or skills through the addition of new people New knowledge acquired and generated through sharing of best practices or consulting with relevant experts New knowledge generated by a formal R&D process. The intent of a knowledge supply chain (KSC) is not to manage the content of knowledge. It is simply to recognize the existence of all the interdependent steps and partners, and then, through the application of proven management principles, to integrate and improve that process.
When establishing knowledge supply chains, its important to consider an even more diverse set of partners than in a material supply chain. The individual and the academic institution are two potential partners to include. Clearly, knowledge is an individual function, so all KSCs must begin with the individual. While including and empowering the individual are consistent with characteristics of the NGM company, inclusion and empowerment are essential for the success of knowledge supply chains. Individuals, however, are often part of a larger academic organization that integrates individual knowledge output into a larger purpose or mission. Given that an academic mission is centered on knowledge or its applications, a company must recognize when to include academia as part of its KSC. 1.5 The Key Partner Is the Individual Knowledge is about action. Knowledge is information put to productive use. Knowledge, unlike information, is not static; it is dynamic. Ikujiro Nonaka and Hirotaka Takeuchi, in their book, The KnowledgeCreating Company, define the interaction of information and knowledge as follows: Information provides a new point of view for interpreting events or objects, which makes visible previously invisible meanings or sheds light on unexpected connections. Thus information is a necessary medium or material for eliciting and constructing knowledge. It affects knowledge by adding something to it or restructuring it. Nonaka and Takeuchi further state, Knowledge creation is anchored in the very important assumption that human knowledge is created and expanded through the social interaction between tacit knowledge and explicit knowledge. The quintessential knowledge-creation process takes place when tacit knowledge is converted into explicit knowledge, i.e., when our hunches, perceptions, mental models, beliefs, and experiences are converted to something that can be communicated and transmitted in formal and systematic language. This use of tacit knowledge demands a system that seeks to use the capabilities and discretionary knowledge of all the human resources who are influenced by that knowledge; a system where all workers are seen as an asset, where the system continually strives to use their new knowledge to further expand its own capabilities. Thus, all members of an enterprise become, in effect, knowledge suppliers or knowledge workers, because they use their heads as well as their hands when they put knowledge into practice. Their act of doing causes them to integrate the tacit knowledge of their experience with the new, explicit knowledge required to provide a product or service. This knowledge mixing creates new tacit knowledge for the individual and provides the system with the potential to capture that knowledge in explicit terms, so it can then be shared with others to create even more new tacit and explicit knowledge. By definition, therefore, every knowledge process begins and ends with the individual. Given that an individual is the key partner in any knowledge process, it is important that the principles of supply chain management apply to him as well as to all the organizational partners. All involved individuals should: Understand how they fit into the larger, integrated knowledge process Operate with a set of unifying goals focused on the ultimate customer Expect to contribute to, and ultimately benefit from, the success of the supply chain Be an integral part of the continuous, free flow of information and knowledge, to eliminate time and ignorance gaps that isolate them from other users and suppliers Have access to the measured results. This is classic, good people-management, and is key to fostering an environment that maximizes the individuals use of discretionary effort. Unfortunately, all too often the individual gets lost as attention shifts to the mega-process of integrating diverse institutions and organizations. The irony of the importance of recognizing the individual as a key contributor of a KSC, is that individuals are also prime beneficiaries. The more that individuals are effectively educated and skilled, the better prepared they are to contribute their knowledge and skills as partners in other knowledge supply chains.
1.6 A Key New Partnership: Academia and Industry The initial step in developing a KSC is to identify and include all key suppliers and users. The most obvious step is to include suppliers in users own organizations or enterprises. It is equally important that users reach out to organizations and institutions not a part of their traditional supplier base. Given that industrial and academic missions are both centered on knowledge or its applications, it seems likely that they need to be partners. Further, industry must recognize and capitalize on all the segments of the academic system. The workforce of the future demands excellence from the total K-80 educational process. Industry in particular depends on the basic skills taught in the K-12 segment. Less than 30% of the members of the industrial workforce have college degrees, and the bulk of incoming talent is a product of the K-12 system. Just as material supply chains taught industry the value of working with all tiers of suppliers, industry must learn to work with all tiers of the academic system. Historically, their different cultures and missions have made industry and academia separate and independent. It is vital that these two institutions recognize and value their knowledge process interdependencies if the barriers of historical separation and organizational culture are to be overcome. 1.7 Requirements for Knowledge Excellence Figure 1.7-1 illustrates the key elements of the knowledge process by using a simple four-part matrix that illustrates the interdependencies between industry and academia. This matrix represents the key activities critical to competitive excellence. Each circle represents a key step in the larger process that yields products and services that meet customer and society needs, as follows: ( upper left) Academic research plays the lead role in generating the basic new knowledge that will ultimately benefit society. It also provides the talent and rigor to develop and substantiate the underlying principles that support the expanding knowledge base of technological and management science. The university plays the major role in ensuring that this new knowledge is made available for the common good and is transferable to a wide set of users. ( upper right) Academia translates new knowledge into new teaching and practices so it can be distributed effectively to the total K-80 educational system as new talent and new curriculum. ( lower left) Industry knowledge-generation assumes the lead role in three key areas: the research associated with understanding customer needs; the research associated with adapting best practices; and the applied research that converts new knowledge into new products and services. ( lower right) Industry education takes the lead in continual education and development of its industrial workforce so that knowledge can be efficiently used.
Academia Knowledge Generation
New Technical & Behavioral Discoveries that Result in New Technologies, New Principles
Knowledge Transfer
New Knowledge Converted into New Teachings, New Talent
Industry
Leading-Edge Product & Process Platforms that Satisfy Customer Needs
Continuously Educated Employees using Latest Knowledge for Effective Execution of Technical & Management Processes
Figure 1.7-1. Requirements for Knowledge Excellence
These four components are shown as separate, distinct elements to mirror todays behavior. The solid bar emphasizes the barriers of difference and ignorance that separate industry and academia. Todays global competition makes efficient access to knowledge every bit as critical as was efficient access to material in the early 90s. The barrier of separateness makes that same kind of access impossible. The good news is that todays disconnected knowledge system parallels the non-integrated material supply systems of less than 10 years ago. The fact that the material process, through supply chain management, could significantly reduce the distrust and communication barriers that existed between customers and vendors gives hope and direction for achieving similar results for the knowledge process. 1.8 Partnership for Knowledge Excellence Figure 1.8-1 shows a conceptual model of an industrial/academic knowledge supply chain. This model moves from systems of separateness to systems of integration and reflects the teaming characteristics demanded by the next-generation enterprise.
New Knowledge New Talent Knowledge Generation Knowledge Transfer
Academia
Joint Research Customer Solutions New Knowledge Knowledge Applications Best Practices Customer Needs Customer Feedback New Knowledge to Satisfy Society Competence & Ability to Learn Faculty New Talent Curriculum Stakeholder Needs Talent Specification Industrial Teachers
Industry
Knowledge Generation Knowledge Transfer
Integrated Enterprises Integrated Product/Process Development Learning Organization Enterprise-Wide Supply Chains
Figure 1.8-1. Partnership for Knowledge Excellence This chart suggests some major changes and improvements that result when the principles of supply chain management are applied. 1. It recognizes that the knowledge process is a continuous, closed-loop process where each entity contributes to the success of the whole. 2. The overlapping areas symbolize the interdependencies. Success requires elimination of the ignorance and distrust between entities to capitalize on the different strengths and capabilities of each partner. 3. The arrows represent the knowledge and information flow which defines the needs of each value-adding entity. When these needs are not met, these communication flows allow the partners to jointly review and correct the non-conforming processes that prevent the desired results. 4. The non-overlapping areas represent the unique needs and capabilities of each partner. All partners must recognize that satisfying the ultimate end customer can be sustained only when each partner is also satisfied. Each partner has a responsibility to help the other partners to succeed. Supply chains depend on successful partners as well as delighted customers.
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In essence, to be successful the knowledge supply chain, like any other supply chain, must embrace and apply the principles of supply chain management. The recognition by both industry and academia that they are critical elements of one, integrated process or supply chain gives a sense of mutual purpose. Industry and academia each have an important contribution to make, and each can learn from the other. This cooperative integration will foster the following new behaviors, which parallel the behaviors of material supply chain partners: 1. Long-term relationships will be the norm. There will be a commitment to work together for the long haul, through good and bad times. This long-term commitment will move the relationship from one of sponsorship to one of partnership. 2. There will be a commitment to spend relevant time in each others environment. This will require reward and recognition systems in both industry and academia that support partnership behavior. 3. There must be willingness to trust and to capitalize on these deeper, long-lasting partnerships to leverage scarce resources. Both industry and academia are or will be under tremendous cost and spending pressures, and their willingness to share facilities, equipment, talent, and knowledge will be key to reducing costs. Figures 1.7-1 and 1.8-1 illustrate the difference between what is and what could be. If the interrelationships of Figure 1.8-1 are achieved, then this new academic-industry partnership will position future KSCs to reap benefits similar to those being achieved by material supply chains. The emphasis on the importance of this new partnership between industry and academia does not mean that all knowledge supply chains will require both as participants. In fact, many KSCs should begin and end within one company or industrial enterprise. But the maximum benefits will come to those companies who most quickly expand their concept of partnership beyond their traditional partners to include all tiers of knowledge suppliers that impact their specific knowledge needs. What unites and focuses a KSC are the needs of the ultimate end customer. These end needs create the pull that establishes success factors and forces measurements that will serve as the leverages to ensure benefits for each of the supplying partners.
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2.0 BENEFITS 2.1 A Pull System Enables Stakeholder Benefits Missed opportunities result from a system that copes instead of pulls. When industry acquires a physical commodity it drives, or pulls the system by establishing a demand, defining clear specifications, redefining processes and responsibilities, and measuring results. However, when industry acquires the knowledge commodity, it is much less demanding: it tends to cope with the system. Its demand signals are less clear, its specifications often abstract, its expectations for the deliverable less high, and it settles for reworking the product rather than fixing the process. The mainframe storage market demands a 30% to 40% annual cost reduction on our storage devices. What would it look like for EMC to place a 30% to 40% cost reduction goal on its university talent supplier? This would probably require EMC to better define our spec for the universitys product, but then we could work with the manufacturer directly, jointly contributing to the design of the product and ensuring that when it leaves the factory, no incoming inspection would be required, and that it would be 100% plug-and-play compatible and immediately useable. Steve McConnell, EMC Corp. Knowledge supply chains are not an intellectual exercise. A knowledge supply chain, like a material supply chain, can provide significant reductions in costs and delivery times, as well as increased functionality and higher quality. But these significant benefits can only come when the customer sets high expectations, then pulls on the system to deliver the results that meet those expectations. But supply chains are only sustainable when the supply partners also benefit. The challenge, therefore, is for all the partners to work together to meet needs of the end customer in ways that yield positive results for the suppliers. The concept of plug compatible knowledge may be wrong as a universal concept, but it is equally wrong to accept that it never applies. While it is dangerous to simply treat knowledge as a thing and to trivialize the rich complexities of human interaction that make the knowledge process so dynamic, it is equally dangerous to fail to apply new concepts. When we fail to apply new knowledge process concepts, readily achievable benefits are never realized and new levels of performance are never attempted. The value of knowledge supply chains, as with any supply chain, is their ability to improve the process and provide tangible results on what is right and beneficial for all stakeholders. The opportunity for an enterprise to significantly improve its bottom line with increased revenues, increased margins, and reduced costs is enormous. Realizing this bottom-line potential begins by establishing initial bottom-line targets for the knowledge process that parallel results achieved by the material process. Table 2.1-1 represents improvements achieved by the material process, and they serve as a good first-approximation guide for target-setting the knowledge process. Table 2.1-2 represents the categories of benefits that KSCs can provide. The actual benefits depend on the enterprises ability to quantify its current results, then work with its appropriate knowledge supply chain partners to develop the appropriate goals in the areas of cost, time, quality, and functionality. Table 2.1-1. Initial Enterprise Benefit Targets for Knowledge Supply Chains
Element Reduced cost to acquire knowledge Reduced time to acquire and effectively use knowledge Improve the quality of the knowledge transfer Improved knowledge functionality Benefit 20% 50% 50% 50%
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Table 2.1-2. Benefits of Knowledge Supply Chains

Bottom-Line Benefits for the Enterprise More effective & efficient access to knowledge Reduced technology development & deployment cycles Improved ROI on enterprises knowledge investment Total research & development investment Total education & training investment Reduced waste in knowledge-acquisition process Increased workforce & workplace functionality: Increased workforce skills Skills certification & transferability Optimized workforce turnover Increased individual discretionary effort Increased understanding by students & faculty at all levels of the education system of the business & competitive needs of industry Facilitates job & skill shifts between regions & counties while increasing benefits to all stakeholders, including the individual
Systemic Benefits for the Nation Increased ROI on nations knowledge investment Total research & development investment Total education & training investment Increased ROI on individuals knowledge investment Improved potential for individually customized K-80 education & training processes that balance the needs to prepare people for current & future work
The benefits that apply to the larger, national system are harder to quantify, because they are a function of the aggregate set of knowledge supply chain actions taken by individuals, enterprises, academia, and communities. It is important to recognize these systemic benefits, however, to demonstrate that benefits from knowledge supply chains apply to more than just the enterprises that use them. 2.2 Specific Benefits 2.2.1 Effective and Efficient Access to Knowledge Lester Thurow, in his book Head to Head, points out that historically, competing societies and competing companies could add value and achieve advantage through various factors, including capital, labor, materials, and knowledge. Thurow stresses, however, that in todays global market, most all of these resources are available to all competitors: all corporations borrow from the same capital markets and tap the same labor markets. Therefore, the only remaining sustainable source of competitive advantage is effective implementation of new knowledge: new knowledge that leads to the innovation of new products and services; new knowledge that increases the productivity of the processes that deliver these products and services; new knowledge that drives change and creates new business opportunities that provide a competitive advantage. In todays globally competitive environment, competitive success demands continuous excellence in all of these three categories: innovation, productivity, responsiveness. Productivity alone may increase competitiveness and profits, but when productivity exceeds growth, either profits or jobs are at risk. Innovation alone may provide a competitive edge until a competitor provides a similar solution cheaper and faster. Finally, great innovations, efficiently produced, are only of value when they quickly respond to the needs of an ultimate consumer. It is the sum of all three that yields economic security for both the enterprise and the individual by ensuring sustained competitive growth, which is necessary to support rising profits and increasing wages. Innovation, productivity, and responsiveness depend on timely access to knowledge. It is the application of knowledge to knowledge that leads to innovation. It is the application of knowledge to work that leads to productivity. It is the application of the knowledge of what can be done, to the knowledge of what needs to be done, that leads to responsive and useful change. It is sum of all these knowledge-driven activities that provides the enterprise with its competitive edge.
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This process, stated as a formula, would be as follows:

Research + Education Technology + Good Management Theory + Practice = = = Innovation + Productivity + Responsiveness = Competitiveness
Knowledge is what enables innovation, productivity, and the ability to understand and meet the true needs of customers. Knowledge is what drives technology development and shortens technology deployments. Therefore, the key enabler for the Next-Generation Manufacturer will be its effective and efficient access to the knowledge critical for its business. The cost of inadequate knowledge is prohibitive. It leads to non-competitiveness and eventual failure. In material terms, inadequate knowledge is an unacceptable shortage. The first responsibility of any supply chain is to eliminate shortages by ensuring the on-time delivery of its specified commodity. Following are some typical signs of shortages due to inadequate knowledge: Individuals do not have the right talent or skills to adequately perform the task. The ramp-up time for new hires is too long. It takes too long to move concepts from development to production. The returns from research investments are too low. People are not aware of existing new technologies. Customer satisfaction trends rise too slowly. Corporate reports are not useful.
When a company or enterprise senses that its competitiveness is limited because of the lack of timely knowledge or skills, in whatever form, a first step should be to review the process that supplies that knowledge in terms of a supply chain. Are the steps of good supply chain management being adhered to? Perhaps the development and use of a knowledge supply chain will provide a proscribed process strategy for addressing the inadequate knowledge barrier. At the very least, a KSC provides a proven methodology against which other knowledge acquisition processes can be compared. 2.2.2 Increased Return on the Knowledge Investment The second responsibility of any supply chain is to deliver its commodity economically. Supply chains increase the commoditys affordability by reducing its acquisition and utilization costs, while improving its quality and functionality. Knowledge is an asset. Knowledge creation, distribution, and utilization require investment from the individual, a company, and an institution. Recognizing that investment and measuring the return on that investment are simply good management. Companies are now just beginning to quantify the value of their knowledge assets. The difficulty is in identifying and valuing the knowledge assets they have already acquired. However, an easy starting point for a company or an institution is to identify and quantify their annual investment in the activities supporting their knowledge process. This will allow them to target areas for improvement and measure the effect of changes to improve that knowledge process. Once again, lessons learned from the material supply chain indicate that a supply chain has the potential to reduce the investment while increasing the value of its deliverables. Motorola calculates a return of $33 for every dollar it spends on training. Motorola calculates that every $1 spent on training delivers $30 in productivity gains within 3 years. Since 1987, the company has cut costs by $3.3 billion not by reducing the workforce, but by training workers to simplify processes and reduce waste ( Fortune, 22 March 1993) Beyond benefits to the company, these results can also benefit employees. The Council on Economic Development reports that research on the economic effects of employer-based training consistently shows signifi-
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cant, positive returns to both the firm and the workers involved. Formal, on-the-job training raises the firms productivity by roughly 15-20% on average, with associated gains in individuals innovative abilities and wages. The Motorola example demonstrates the significant financial impact in both costs and returns. However, at this point, more quantifiable data exist for the cost side of the equation: At the macro level, the United States annually spends over $600 billion in support of its knowledge processes (Figure 2.2.2-1). At the company level, the number is just as significant. The typical Fortune 500 company spends over 10% of its annual revenue on officially-accounted-for knowledge processes. There is good evidence that the actual cost may be far higher when all of the non-qualified or mis-allocated costs that support knowledge processes are properly considered. Given that material supply chains have significantly reduced the cost of the material supply process, it is reasonable to assume that similar cost savings can be achieved for the knowledge process. The 20% cost savings associated with material supply chains will serve as a good starting point to determine if the potential benefits justify the efforts for creating knowledge supply chains. At a national level, the typical 20% cost savings when applied to the total U.S. knowledge investment could exceed $120 billion. But as the knowledge investment diagram demonstrates, such savings will require that industry and academia recognize that they are not only potential interdependent partners in individual knowledge processes, but that they are partners in the national knowledge process that leads to increased society satisfaction and improvement of the nations return on its total knowledge investment. At a corporate level, the 20% cost reduction could exceed 2% of the operating revenues. Achievement of these savings starts by capitalizing on the commodity aspect of knowledge that allows knowledge to benefit from a supply chain process with multiple sets of suppliers and customers. The next step is to apply the principles of supply chain management to the sub-processes that make up the total knowledge process. It is important to apply these principles to all four steps of the knowledge process. Improved return on investment (ROI) on knowledge can result from the R&D process as well as the education and training process.
Generation Quantified Investment Development R&D $150B Transfer Use Total $600B
Education & Training $450B Consulting Sharing Best Practices
NonQuantified Investment
Big $ Industrial Internal Functional R&D Recruiting, Interviewing, Start-up Training, Outplacing, Electronic & Print Media
Figure 2.2.2-1. The U.S. Knowledge Investment
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2.2.3 Improving the Efficiency of the R&D Process A major element of a nations or a companys knowledge investment is the knowledge-generation process. While this process comprises many activities, R&D is usually the most visible and most quantifiable of these activities. As Figure 2.2.3-1 illustrates, there are many institutions involved in the process, with industry being the largest spender. Government is also a very active partner as one of the major funding sources for research. The United States invested more than $150 billion in R&D in 1991. University research exceeded $17 billion of the total, or over 10% of the total higher education budget. For a specific research university, research spending might be as high as 50% of its annual budget. Industrys annual R&D expenditure represents approximately 4% of its aggregate spending, with many companies allocating 8-12% to R&D, simply to remain competitive in their markets. The ability to improve a companys or nations return on its R&D investment depends on the ability to recognize and use the capabilities of the R&D process. It requires that a company or enterprise leverage investments made by others in order to improve its own benefits and reduce costs. To show an example of opportunities to engage non-traditional partners and to further illustrate the importance of industrial-academic partnerships, the following section focuses on the benefits of such partnerships. However, the lessons and benefits from this example apply equally to other potential R&D partners such as national laboratories, industrial consortia, and other industrial research centers internal or external to a companys industry. R&D is generally divided into three areas: basic research, applied research, and product and process development, but the separation between each area is fuzzy at best. It is the combined output of the total R&D process that provides new products, processes, and services that satisfy customers, and ultimately society as a whole. In reality, R&D is a continuous process that can be managed as an integrated supply chain. Unfortunately, in todays commercial world the R&D elements are very isolated. This separation is confirmed in Figure 2.2.3-2 by the fact that industry allocates only about 1% of its $110 billion R&D investment to universities. In general, the link between academia and industry is almost exclusively the graduates. Industry looks to universities to provide bright, well-trained students, but beyond the initial hire, industry has no substantial expectations that academia will help with the companys critical research or product or process development. The university system, in turn, does little follow-up and basically views its commitment to industry as fulfilled once a student has graduated.
$11B $8B $5B $24B Basic Research Applied Research New Products & Processes
$5B
$5B
$25B
$35B
$1B
$11B $24B Labs & Institutes
$80B $110B Industry
$92B
$17B Universities
$151B
Figure 2.2.3-1. The U.S. Research Pipeline (1991$)
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120
100
Total
R&D Expenditures ($B)
80
60
40
20
With Universities
0 1979 80 81 82 83 84 85 86 87 88 89 90 91
Figure 2.2.3-2. Industry R&D Expenditures, 1980-1990 This virtual non-use probably results from a combination of historic attitudes and beliefs, some accurate, some not, that stem from the fact that industry and academia do not view each other as partners in the same integrated process. Some examples are: 1. The university is solely driven by basic research, knowledge for its own sake. The university is not interested in other forms of research. 2. The university is dominated by government-sponsored research and does not have time to support industry. 3. The university wants to maintain its distance from industry and does not want to be corrupted by industrys needs; it wants to maintain its academic freedom. 4. The university is too theoretical to help the university is not practical enough to provide cost-effective results. Whatever the reasons, it is important to challenge these historic attitudes and attempt to achieve a more productive partnership between industry and academia. This partnership starts by valuing research as an interdependent, albeit segmented, process that would benefit if treated as a continuous supply chain. A good starting point is to recognize the existence of the larger common or unifying purpose. As economic security replaces military security as the key national security issue, the unifying theme will result from the fact that the combination of industrial problem-oriented research with basic university research provides that security. Industrys problem-oriented research depends on the fundamental knowledge that comes from basic university research. In return, it is often the pull of problem-oriented research that stimulates the need for new areas of basic research. Recently, much of industrys basic research needs were supplied by industrys own research labs or by industrys ability to adapt the output of government-funded research. However, in todays environment, both of these sources of basic research are being scaled back. Now it is the needs of the economic end user not the needs of government that drive and fund university research. While economic security can provide a common focus, a real, committed partnership will only happen when improved results provide tangible benefits for both parties. For industry, this new R&D partnership must provide improved R&D ROI through more cost-effective research that leads to shorter product and process development cycles. The potential 20% cost reductions and 50% time reductions provided by a supply chain are keys to that ROI.
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For a university, this improved ROI would provide a new source of research funding and a new set of customers for its basic research. For the nation, this industrial-academic partnership would help ensure the health of one of our national competitive assets: our research universities. The value of viewing research in a larger, supply chain context is that the process facilitates collaboration between the supplier bases and increased partnership with the customer bases. Given todays limited industrial funding environment, there is a perceived zero-sum game where each university is fighting for a piece of the fixed-funding pie. To the extent that increased inter-university collaborative research enhances industrys ROI, it will stimulate a win-win funding relationship where universities work together to improve industrys economic benefits and thereby further increase industry funding of the university research pipeline. Making this win-win relationship happen is another matter. Treating the research process as an integrated supply chain will require significant changes by both industry and universities. To begin, the supply chain process will only occur if both academia and industry want it to happen: The university must value that its basic and applied research is used to satisfy ultimate customer needs. The company and its enterprise must value that the university can be an integral and indispensable part of the larger product-development and product-delivery process. Both must believe that the cost and time advantages of this integrated research relationship will increase significantly as the relationship grows stronger. These advantages would: 1. Provide industry better access to generic knowledge that could have a major impact on product and process development. 2. Speed up the technology transfer of basic research into end products and services that satisfy customer needs. This speed of transfer is vital, for much of todays economic competitiveness is a function of how fast a firm can convert new ideas to new uses. 3. Accelerate the acceptance and value of basic research by: Ensuring a closer coupling of the relevance of that research to ultimate customer needs Improving the speed and quality of knowledge from the user back to the university researcher Improving the universitys access to practical information about an industrys commercial applications Improving the timeliness and usefulness of how basic research is applied by those who convert it into products and services Allowing the university to remain at the forefront of leading-edge practices concerning the use of basic research. 4. Reduce the costs of the research process through efficient use of people and capital assets. Research, like all supply chains, cannot afford the waste that is associated with inefficient knowledge transfer or inefficient use of people or equipment. The more the university is separated from the industrial research and development process, the more likely the process will incur added cost and lost time in transfer, human resources, and equipment. The intent of raising the concept of a research supply chain is not to provide answers, but to stimulate questions about what benefits might be possible if the total process behaved as an integrated system. A similar scenario and set of questions are associated with the education process. 2.2.4 Increased Return on Education and Training In 1991, higher education, industry, and the K-12 educational system each spent about $150 billion to deliver education and training (Figure 2.2.4-1). The process is shown as a pipeline to reflect that its true purpose is to ensure a flow of knowledge embodied in the graduates of each segment. It is the output of the applied knowledge of all the graduates at all levels of the workforce that provides the products and services that satisfy society. It is the responsibility of this
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$150B
$150B
$150B
$450B Professionals, Executives Engineers, Managers Technicians, Supervisors, Support Services Operators
K through 12
Colleges & Universities
Industry
Figure 2.2.4-1. U.S. Educational Pipeline total process that ensures that those entering or reentering the workforce are properly qualified for needed positions at all levels. But it is also the responsibility of this total process to ensure that those in the workforce are being efficiently and continuously educated and trained, so they will have the skills to meet the changing needs of the workplace. The pipeline also illustrates the huge annual investment in education and training. This investment is growing at an annual rate almost twice the rate of the consumer price index. Unfortunately there is a parallel between the health care system and the education system, and just as the nation can not allow individuals to be priced out of health care, the nation cannot allow individuals to be priced out of education. Since 1980, the average tuition at all 4-year colleges has soared by more than 86% after inflation. The yearly cost of college now absorbs about 25% of median family income, vs. 17% in 1980. (Business Week, 18 March 1996, pg. 39). The investment matrix shown in Table 2.2.4-1 represents a conceptual delineation of how companies prioritize their education and training dollars. Clearly, the numbers vary with a companys size, culture, and industry, but the message is consistent: the higher the cost, the fewer the participants. Unfortunately, in todays world of isolated education and training systems, most programs are so high in cost that the majority of individuals in the industrial workforce (the 1000+ in Table 2.2.4-1) do not have opportunity to benefit from continuous education. Further, the legacy of Frederick Taylor and his scientific management of work, which caused many jobs to be reduced to a few repeatable tasks, reinforced the belief that education and training only needed to be applied to limited numbers of workers involved in complex and highly skilled jobs. Once again, the underlying questions are: how can the principles of supply chain management help reduce the costs and increase the timeliness, quality, and functionality of the total education and training process? What does each of these educational providers contribute to ensure a more able, educated society? How does each provider contribute to the development of the number of knowledge workers required to ensure our economic security? Is this a smooth, integrated process that allows free flow of information among all its partners? Is there redundancy and waste in the system due to ignorance and isolation among partners? Are we getting an optimum return on the $450 billion investment? Is the $150 billion spent by industry by design or by default? The American Society for Training and Development (ASTD) estimates that $25 billion of the $150 billion is spent on remedial training. In terms of a material supply chain, thats a lot of rework. Table 2.2.4-1. Education/Training Investment Matrix
Cost per Individual for Education/Training $10,000 $1000+ $100 Approximate Number of Employees Who Can Participate 1 to 100 100 to 1000+ > 1000+
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By carefully re-examining the objectives and resources of industry and academia in the context of a unified supply chain, we can challenge the historic assumptions of who teaches what, when, and where, to capitalize on new collaborative strategies that will better satisfy the educational needs of the individual and the economic and flexibility needs of the enterprise. To the extent a KSC can achieve economy of scale and scope through inter-academic and inter-company partnerships, the unit cost can be reduced and the cost effect that reinforces the Taylorism mindset can be challenged. 1. Could a university, in strategic partnership with selected companies, assume ownership of certain portions of lifelong learning with those companies? The joint Wayne State and Ford Motor Company program of providing masters degrees for on-site, on-the-job engineers is one such example. 2. Could a university establish a division of continuous education with a workforce of individuals who would spend a portion of their careers dedicated to distance learning, bringing university knowledge directly to the workplace? Could industry and universities find ways for these individuals, and others from the industrial workforce, to have careers that integrate learning with traditional industrial activities? For example, the traditional education system has for the most part not chosen to use the resources of industry to provide some of the teaching and learning experience that might better serve student needs. Would a course in Basic Business Finance be better taught in an industrial environment, where the demands of the job and the needs of the business provide the real-life experience that accelerate the learning process? 3. Could universities expand the formal education system beyond the traditional on-campus, 4-year undergraduate curricula into a more open system in which students spend fewer contiguous years in residence, followed by a period in a mixed internship/working environment? During this period, the larger industrial-academic knowledge supply chain would assume formal responsibility for educational delivery. That is, some creative combination of industry and academia would provide an individuals education. In a less ambitious alternative, could universities provide education chits that graduates could use at any time in the future to renew their education? 4. Could the K-12 system include a process whereby industry outsources real manufacturing tasks to a school, enabling the teachers and students to become a direct part of the commercialization process and experience first-hand the practices required for competitive success? Minuteman Vocational Technical High School in Massachusetts, in partnership with MIT, Middlesex Community College, Digital Equipment Corporation, and Raytheon, started such a program in 1992. 5. Could school-to-work programs, such as Siemens U.S. apprenticeship program and Fords FAMS program, which partner industry with regional high schools and community colleges to provide students with work-based learning opportunities be expanded? Currently in the U.S., only one in three members of the workforce have qualifications beyond a general high school diploma. By contrast, due to widespread use of apprenticeship programs, less than 20% of German youths enter the workforce without occupational qualification. 2.2.5 Supply Chains Encourage Out-of-the-Box Thinking The greatest advantage of any supply chain is its ability to set a stretch objective beyond the ability of any one organization to meet, but which provides an out-of-box target for the combined efforts of the supply chain. For example, a group of industry and faculty representatives are seeking ways in which the benefits of MITs education and knowledge can be made affordable for many individuals in their companies. It is hard to predict what a future version of the educational pipeline might look like if it operated as a truly integrated process. Once again, experience from the material supply chain indicates that it can be more productive and less expensive when all the partners jointly define their needs and realign their collective resources to meet those needs. The next two sections provide further examples of the benefits that can be achieved by applying supply chain thinking to the larger knowledge process.
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2.2.6 Reduced Waste With TQM and Zero Defects Treating the knowledge process as a supply chain allows the system to adapt the concepts of TQM and Zero Defects to significantly reduce the costs of knowledge management by improving the quality of the processes. It provides a process to ensure that the graduates that move between the partners efficiently meet the needs and specifications of the buyer. Industry recognized, through the principles of TQM and the practices of material supply chain management, that inspection, iterative testing, rework, and obsolescence were non-value-adding, cost-generating, and timewasting activities, caused by disconnected or nonconforming processes in the supply chain. These costs of nonconformance which often exceeded 20% of total manufacturing spending, can be identified, understood, and corrected when the supply chain participants work together to re-engineer the total process to remove the redundant operations and fix the defects at the point of creation not at the point of use. Is it too much to expect that the knowledge supply chain should operate with the same rigorous expectations? How does the cost of non-conformance apply to the knowledge supply chain? As mentioned earlier, ASTD estimates that the nation spends $25 billion a year on remedial training. Table 2.2.6-1 uses data and experience from Digital Equipment Corporation to illustrate this concept. The $214M was 8% of total manufacturing spending, and it was reduced from $500M in three years through the application of TQM and improved supply chain practices. Table 2.2.6-1. Digitals 1991 Estimated Cost of Nonconformance
Product Inspection Retest & Diagnosis Rework & Repair Scrap Excess Inventory Obsolescence $31M 14M 25M 89M 18M 37M $214M People Interview & Test Remedial Training Discharge Under-used Employees $75M 44M 25M 500M $650M
Total PONC* * price of non-conformance
The People column represents the approximate costs in that same time period for the potential nonconforming human resources activities that can be related to the comparative Product activities. Presenting costs in this manner forces the system to question the non-value-added parallels between inspection and interviewing, rework and remedial training, scrap and discharge, excess inventory and under-used employees. Do these people costs occur simply because we have failed to work proactively with the suppliers to fix the process problems that created these defects? This, of course, depends on the availability of good product specifications, with prompt and detailed feedback when the results are not met. The $650M annual people expense in the table presents a meaningful area of opportunity. Are the areas of non-value-added activities really that much different between the product and people processes? Does a system fail to achieve the same kinds of improvements in the education process simply because it fails to practice the same quality and supply chain principles? In reality, Digital was not thinking of these people costs in the non-value-added terms of a supply chain. Rather, at that time, the people nonconformance costs were regarded as the price of doing business. There was no expectation that a larger, integrated knowledge supply chain would reduce or eliminate them. But this is not surprising given that before the implementation of material supply chains, most of the costs of inspection, rework, and high inventory were also regarded as the price of doing business.
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2.2.7 Increased Workforce Flexibility Through the Discretionary Effort of a Secure Workforce Increased product functionality refers to the increased performance capabilities of a product or material. The component is capable of doing more, which gives the host system greater potential and flexibility. An effective education and training process can similarly increase the functionality or discretionary effort of its knowledge users. It is the individuals discretionary effort that allows him to contribute beyond the minimums defined by a job description. This is what provides the innovation, efficiency, and responsiveness that gives an enterprise its collective competitive edge. An individuals discretionary effort is a function of his inherent knowledge and skill base as well as his motivation to use that knowledge base. A strategy to capitalize on the discretionary effort of the individual starts with a process for continually increasing that individuals knowledge and skill base so that he is prepared to not only do assigned jobs better, but is also capable of doing or learning other jobs faster. In essence, these additional capabilities increase the individuals potential discretionary effort. But the application of that potential is at the discretion of the individual. What motivates an individual to do that something extra typically comes when he is confident that he has the skills to do his job, is empowered to meet his responsibilities, and is secure about his future. Historically, both the individual and the company assumed that these characteristics were best provided by one employer through a social contract of lifetime employment. People joined their respective institutions with the intentions of staying with those institutions until they retired. Employees assumed that the company would provide the necessary career development and growth path that would properly match their skills with the required job assignments. People also intertwined their identity, sense of worth, and loyalty with their particular "lifetime" employers. Companies recognized the benefits of secure employees, and they reinforced this connection by providing financial and emotional incentives so that "no one really good would want to leave. This concept of lifetime employment also ensured the company that their investment in education and training would be returned to their enterprise. As a result, an often-used measure of a good company was its low employee turnover rate. However, in todays world of global competition and rapid technology changes there are emerging factors that limit the ability of one company to provide all the necessary training, opportunities, and security that foster discretionary effort. First, the amount of education and training required to continually keep the individual adequately skilled will need to increase to keep pace with the accelerating rate of change. Some firms, such as Motorola and General Electric, foresee the day when training may meet the equivalent of one month per year per employee. Few companies, especially small companies, will have the necessary resources to provide that level of training. Second, the rapid change of technology suggests that future lifelong training and learning processes must embrace a combination of methods computers, communications, entertainment, media, publishing that will exceed the competencies of any one institution, system, or even one industry. Third, the companys economic security now depends on its ability to rapidly restructure and re-size its workforce according to the changing demands and needs of its customers. When this necessary workforce resizing happens before the institution or the individual is properly prepared, the negative impacts are significant. Beyond the high cost of lost income for the individual, and the millions, if not billions, of restructuring costs for the company, these forced separations shatter the security for all employees and severely limit future discretionary effort by that individual or any remaining employees. These issues create a major paradox for the next-generation company. On the one hand, their economic security demands that they have access to continually upgraded knowledge workers. The dilemma is that the better companies train and upgrade the skills of their employees, the easier it is for the employees to quickly move to new jobs. On the other hand, that same economic security demands that companies rapidly adjust the size of their workforces when the needs of their customers change. With the increasing need for organizational flexibility, neither the individual nor the enterprise will have the stability of the historic norm of lifetime employment. No longer will goodness be defined by a low employee turnover rate. The issue will now be how can the individual and the enterprise work together to
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achieve an optimized turnover rate that balances the needs of both. All of these negative shocks can be reduced or eliminated when a company and the individual are better prepared and even proactive in ensuring a flexible workforce. To achieve a new workplace environment that fosters discretionary effort and meets the needs of both the employee and the employer will require a new form of social contract that is based on a partnership between the individual, the enterprise, and the community. Future economic security for the individual will depend on his ability to quickly realign his skills with the shifting needs of the larger marketplace of companies. Security and flexibility for the individual will be related to his ability to have continuously expanding skills and knowledge that will make him easily transferable to new employment sites. His need to be transferable adds a new dimension to his need for continuous education and training that is greater than the requirements of just one employer. Now marketable transferability becomes the necessary end and goal of lifelong learning. It shifts the focus from being dependent on lifetime employment to being empowered for sustainable employment . In this age of flexibility, an individuals loyalty must extend beyond his current employer. No longer can he assume that his current employer will provide the necessary development and career opportunities that fully satisfy his lifelong needs. He must now also be loyal to his own development needs to ensure his employability and his ability to contribute beyond one employer and one career. This demands that individuals take on a new responsibility for their career development. But this requires that they have access to affordable education and training, which requires a new role for the community. Employment security will also include having access to jobs outside an individuals current employer, so again the community becomes a key member in the new evolving social contract between the individual and the workplace. Train employees for new careers outside of Motorola. Develop an alumni resource base that we will continue to support and which will continue to enrich the corporation and the customers we serve. Motorolas 1995 Corporate Manufacturing Goals Companies can recognize the inevitability of this flexibility and therefore capitalize on it. One alternative that Motorola has adopted is to accept the fact that they will train employees who may not work for them in the future, so they turn those trained human resources into assets. This is where the community becomes a key partner in the process by providing a solution to the dilemma through the availability of a larger integrated knowledge process. It is evident that industry and academia must closely integrate their resources to better understand and define the needs of the workforce, and then to deliver the expanded knowledge supply chain in a timely, effective, cost-efficient manner. This naturally leads to the question of who will provide this extended education? Should this be industrys responsibility? Or should academia be more involved in the delivery of lifelong education? What are the roles and responsibilities of the individual and the community in this process? How does the total integrated system expand to include a process for job placement and locating new job opportunities? As an example, the MassJobs Council Career Center Initiative will consolidate all employment and training services into a state-wide network of career centers. The MassJobs Council envisions career centers becoming known as the primary places to go whenever an individual faces career preparation or transition decisions, or when employers must address employment or staff training needs. There are no obvious answers to the above questions. But recognizing and capitalizing on all the capabilities of a larger knowledge supply chain focused on the paradox of increasing the discretionary effort of the workforce and the flexibility of the workplace, while increasing the security of the individual, may provide the solution. Clearly this is a tough problem, but it is also a real problem that all enterprises will face, and the enterprise that can resolve it most successfully will have a competitive advantage. The intent up to this point has been to raise the concept, principles, scope, and benefits of a knowledge supply chain. The beauty of knowledge supply chains, just like material supply chains, is that they are easy to implement. The next section details how a company can form its own knowledge supply chain.
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3.0 IMPLEMENTING KNOWLEDGE SUPPLY CHAINS Knowledge supply chains are not about education or research reform. They are not about restructuring our industrial and academic institutions. They are not about trying to fix the massively complex total knowledge process all at once. They are simply tools to better integrate the same elements now engaged in knowledgerelated activities. The beauty of knowledge supply chains, like product supply chains, is that they do not have to be built from the ground up. All the elements exist, even though they are often isolated. The value of knowledge supply chains, like physical supply chains, is their focus, which limits the partnership to those contributing and using the targeted knowledge assets. Focused knowledge supply chains only require the agreement and participation of those contributing to the specific area of knowledge. The following list outlines the basic steps for implementing a knowledge supply chain. There is nothing profound about this outline, other than that it provides a checklist to ensure that each step is addressed. Failure, with any supply chain, occurs when partners or steps are excluded, or when the supply chain is expanded before its preceding steps are in place and their results achieved. Once success is achieved, then the concept of supply chains can be expanded in scope and number of applications. The steps are as follows: 1. Identify the specific type of knowledge required to meet a defined customer need, and establish an initial two-link supply chain between the knowledge supplier and the user. 2. Recognize and compensate for the barriers that impact a knowledge supply chain. 3. Ensure that the supply chain principles are properly applied. 4. Determine if the initial two-link knowledge supply chain effectively satisfies the defined knowledge need. If not, expand to include the next tier of knowledge suppliers. 5. When appropriate, institutionalize this supply chain to meet future needs. 6. Share best practices with other knowledge supply chains. 3.1 Start Small With a Visible Need Knowledge supply chains start by identifying a specific type of knowledge required to meet a clearly defined customer need. Next, an initial two-link chain is established between the primary knowledge supplier and the primary knowledge user. One such example is the knowledge supply process between MIT and EMC Corp., which provides operations leadership talent to meet EMCs growing business needs. MIT and EMC are working together to ensure that talent specification is defined and understood by both partners. Specifications are also being defined on the expected ramp-up time for the individual. Finally, cost and benefit expectations are being established to ensure that the affordability index for this talent increases every year. Other examples of initial two-link knowledge supply chains are: Exchanging technology development strategies with a supplier Sharing incoming customer orders with a supplier Establishing minimum hiring skill levels with an employment agency Beta-testing with a customer.
The advantage of beginning small and focused is that quick success soon follows, providing a platform for future expanded knowledge supply chains.
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3.2 Recognize the Knowledge Supply Chain Barriers The implementation of knowledge supply chains will be limited by a number of barriers. The solution to many of these barriers will require new behaviors and new industrial and academic business practices. In the meantime, the more all the partners recognize and understand how these barriers impact their supply chains, the better they will be able to deal with them. It is important that these barriers do not deter the implementation of new knowledge supply chains. In fact, it is the use of KSCs that will provide the motivation and teamwork necessary to overcome the barriers. Following are some of the generic barriers that most supply chains will face: The de-humanization of knowledge as a commodity that can be managed by a traditional supply process. Given that knowledge is so human-dependent, there is a reluctance to equate the complex knowledge process with the flow of physical material through a system. The inability or inexperience to know how to specify, quantify, or value knowledge, all of which are basic requirements for an effective knowledge supply chain. The inability to measure the flow of knowledge or to know when the knowledge transfer is complete. Material is a tangible unit that moves. The material system can verify that a unit has been transferred by its physical departure from the supplier and its physical arrival at the end user. No such clear transition points occur in the knowledge process, because knowledge never leaves the supplier. Even when the knowledge is embedded in an individual, and the individual physically moves, it is still difficult to quantify specifically what knowledge was actually transferred with that individual. Lack of widespread understanding and first-hand experience with the benefits of supply chains. While much has been written about supply chains, relatively few people have actually been involved with them. The success of any supply chain depends on belief and trust. Supply chains demand emotional and intellectual understanding, and those only come from actually using and depending on them. Knowledge supply chains need that same kind of commitment. Time pressures. Implementation of supply chains requires time to work with new partners and develop new processes and measurements. This requires long-term thinking in a world driven by short-term pressures. Desire to control and protect knowledge. If knowledge is truly the last sustainable resource that provides a competitive advantage, organizations will be reluctant to engage in a process that increases the probability that a competitor might have easier access to that knowledge. The historic barriers that separate industry and academia: Different time horizon and time constant The role of consulting vs. research Research vs. implementation Intellectual property: ownership; confidentiality vs. publish Curriculum development: state-of-the-market vs. state-of-the-art Continuing education: corporate universities vs. academic universities; who pays, who profits. The MIT/EMC example again illustrates the value of recognizing some of the barriers. The process of defining the talent specifications were made easier as both partners accepted the differences in expectations around curriculum development. Through discussion with industry practitioners, MIT recognizes the importance of building more practicality into its curriculum, and the industry practitioner recognizes the importance of understanding the theory in order to have a stronger platform for future skill enhancement.
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3.3 Practice the Principles of Supply Chain Management Integrate Process With Common Goals and Objectives To be effective, a knowledge supply chain must have a clear vision or objective that provides a common purpose for all of the supply chain partners and indicates why they are necessary and valued contributors to the supply chain. These unifying visions or objectives will range from large, long-term systemic issues to shortterm very specific issues. The following are some examples of national or regional knowledge supply chains that are addressing longer term, systemic issues: LFM Program (Leaders for Manufacturing Program) The Leaders for Manufacturing Program is a partnership between MIT and 15 U.S. manufacturing firms whose mission is to discover and translate into teaching and practice principles that produce world-class manufacturing and manufacturing leaders. JACMET (Joint Arizona Center for Manufacturing Education and Training) JACMET is a national model for collaboration between industry and universities to provide career-long, professional learning for graduate engineers who work in manufacturing and product development. PALMS (Partnership Advancing the Learning of Mathematics and Science) PALMS is a cooperative effort between the Massachusetts Department of Education, the National Science Foundation, and representatives from local educational and industrial institutions to systematically improve the learning and teaching of mathematics and science in grades K-8. But the value and importance of KSCs is that they also apply to very limited and very specific tasks that may only involve a few partners. What is important is not the scale and scope of the supply chain, but rather the clarity of the purpose so that all partners can recognize what the objectives are and how they can contribute to the achievement of those objectives. The following represent examples of the objectives of a more limited and focused partnership.
The objectives of the MIT-EMC partnership are to make the hiring of MIT graduates by EMC more effective and efficient. This will be accomplished by a better understanding the specifications EMC needs and the education and work experience specifications of a graduate. This will allow the graduates capabilities to be more quickly and fully used when hired.
The goal of sharing actual incoming orders directly with a supplier is to reduce inventory levels at both the supplier and the manufacturer, while improving delivery times to the customer. Focus on the Ultimate Customer Supply chains will only succeed if it is clear who is the ultimate customer. It is that customer who provides the end objectives, establishes the standards, and measures the results. It is the end customer who provides the pull and focus that unify the total process. Further, it is important to identify who represents or speaks for the ultimate customer, who defines the knowledge specifications, and who declares whether or not these specifications have been met. The identification of the ultimate customer does not mean that the needs of all the stakeholders are not important, or that the needs of other stakeholders should be sacrificed for the ultimate customer. The purpose of the ultimate customer is simply to provide the focus that allows the system to operate to a common and measurable objective. Without a clearly defined and personified customer, the knowledge supply chain will lose focus and each partner will naturally shift his efforts to maximize his own objectives. In the LFM example, the ultimate customer is each industry partner, which is personified by the senior executive who represents that company on the partnerships governing board. In the EMC example, the customer is EMC, represented by their Senior Development Manager.
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Improve Each Partners Operating Performance For any supply chain to succeed and be sustainable it must benefit not only the end user, but also all the partners who participate, including the individuals. Therefore, every KSC must determine how it can satisfy all knowledge supply chain partners and end customers. For the industrial partners, the benefits will be those that meet their business needs (e.g., improved profits, reduced costs, faster and more efficient access to new talent and technologies) and increased workplace flexibility without penalty to individual employees or other stakeholders. For individuals, it will be returns that add to their short-term and long-term economic security; e.g., ability to participate in the short-term economic success of a supply chain, ability to increase their knowledge and skill base to enhance their lifelong employability, and improved access to continuous-education knowledge supply chains that allow them to grow to higher levels of education and training at affordable personal costs. For non-traditional partners such as communities, associations, and academia, the benefits may be less obvious. This requires that the process for determining the needed benefits be more rigorous. Following are some ways that academia and industry can benefit each other: Industry can provide long-term support for academia in time, energy, resources, and laboratories for faculty and students. Industry can quickly test new knowledge and quickly provide feedback on the value and applicability of that knowledge. Academia can ensure that new knowledge is effectively and efficiently converted into new innovations that meet customer needs. Academia can help industrys continuous education process. Continual improvement depends not only on how well students are taught on-campus, but also on how well the workforce is developed on the job. Academia can play a role in improving economic competitiveness in a way that benefits from this improved competitiveness. As our national priorities shift from military security to economic security, a focused industrial/academic research partnership can maintain or increase the current total of funded university research, while significantly increasing the value of the research output that supports industry and the commercialization process. Ensure a Free Flow of Information and Knowledge The challenge of knowledge supply chains is that they must embrace a more diverse set of institutions and entities than do physical supply chains. To ensure that there is a good, continuous flow of information and knowledge across this diversity, there must be mutual understanding, respect, and trust among the potential partners, and they must jointly address the stereotypes that exist among them. The following examples relate to industry and academia, but they indicate the kinds of stereotypes that exist among functions within an organization, or between industrial suppliers and customers. The university is solely driven by basic research knowledge for its own sake. The university is not interested in other forms of research. The university is dominated by government-sponsored research and does not have time to support industry. The university wants to maintain its distance from industry and does not want to be corrupted by industrys needs; it wants to maintain its academic freedom. The university is too theoretical to help the university is not practical enough to provide cost-effective results. Industry is too short-term focused and will not invest in long-term strategies or projects. There are no intellectual problems in manufacturing.
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Examples of information and behavioral exchanges that will improve communication: Industry will provide information to academia about its current practices, problems, and needs. Academia will listen to the needs of industry and to the needs of the ultimate customer. This change begins with the university valuing the role it can play in the basic research process to satisfy industrys newknowledge needs, and in the application of that research to satisfy ultimate customer needs. Industry must not overburden academia with industry problems, or vice versa. A knowledge supply chain is not asking academia to become industry nor industry to be academia. Supply chain principles only require that each partner better serve the other. Academic freedom must not be jeopardized, nor can basic research and the future payoffs that flow from undirected research be undermined. Industry must be able to protect intellectual property rights for competitive advantage. Both must be conscious of the potential conflict of interest that might arise when the partnership seeks to enhance the commercialization process. Use the core competencies of each partner. The above stereotypes impact the larger systems perceptions and expectations of each partners role and responsibilities in a supply chain. For example, historic perceptions between industry and academia have constrained the possibilities of what should be taught and who can teach it on campus and what can be taught and who can teach it in plant. The advantage of treating a knowledge supply process chain as a continuous, integrated supply chain is that it should facilitate the ability to re-engineer the process to eliminate redundancies and to ensure that the steps of the process are performed at a time and place that best serve the total process. Consider the following: Which partner is best qualified to test the knowledge product the supplier or the customer? How do you capitalize on the knowledge/expertise of the customer and each tier of supplier? How can industry use the university as an integral, indispensable part of the larger product development and delivery process? How can the university value the potential roles in both the basic research process and in the application of that research to satisfy ultimate customer needs? How can the total education and training pipeline better use the resources of the K-12 process? Measure Results Major cost, time, quality, and functionality benefits require clearly agreed-to specifications compared against measured results. Then, when desired results are not achieved, the supply chain partners can jointly reengineer the process to correct the information flows or process deficiencies that prevent desired results. To do this, it is important that every knowledge supply chain develop a matrix for each of the four key benefit categories: cost, time, quality, and functionality. Too often, supply chains miss benefits because they focus on only the one or two areas that are driven by the prime focus of the customer. The value of any supply chain is that it will provide benefits in all four areas. Table 3.3-1 provides representative examples of quantifiable results that measure the effectiveness and efficiency of a knowledge supply chain. The advantage of establishing a measurement process for the four benefit areas is that this is often a good guide to how and where the initial knowledge supply chain should be expanded.
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Table 3.3-1. Representative Knowledge Supply Chain Measurement Matrix

Category Cost People-Embedded Knowledge Reduced training cost per hire Increased skill level per job level (by migrating skills down) Reduced restructuring cost Hiring cycle time Ramp time to effective use Time to learn a unit of knowledge Time to locate a new job Reduction or elimination of remedial training Increased individual performance ratings New hires that meet or exceed hiring expectations Competencies that migrate down the job levels Skills certification that transfers to other levels Skills that match initial job requirements Ability to grow and adapt as job requirements change Explicit Knowledge Greater research ROI Greater education & training ROI Lower cost per unit of education Increased industry-funded university research Shorter knowledge-acquiring cycle (JIT learning) Faster access time to relevant but non-requested knowledge Increased number of qualified knowledge suppliers Knowledge suppliers who meet or exceed needs Ability to understand real customer needs Increased number of contributing knowledge suppliers Expanding relevant knowledge base
Time
Quality
Functionality
3.4 Expand as Needed A knowledge supply chain will expand horizontally and vertically; it will grow in scope and depth. It must extend wide enough to include all relevant providers and users of the knowledge that will add value to the final product of that knowledge. It must include the research centers that generate the new knowledge, the teaching centers that transform and distribute the knowledge, the customers who apply that knowledge, and the end user who benefits from the product enhanced by that knowledge. Similarly, a knowledge supply chain will naturally expand downward to include appropriate tiers of the chain. Just as the material supply process recognizes that the quality or cost of the end product is often driven by the material provided by a third- or fourth-tier supplier, so might the KSC be affected by a third- or fourth-tier knowledge supplier. For example, industry seeks college graduates who understand and practice teaming and collaboration. The foundations for this behavior are initially established in the K-6 tier of the education process. If collaborative behavior is lacking or improperly developed, the K-6 tier as the originating knowledge source is the supplier that needs to be corrected, not the college curriculum. To use a material analogy, dont expect the integrated circuit packaging operation to fix the defective circuit design on the wafer. The MIT-EMC example has already expanded its supply chain to include a specific industry-led research project on teaming and partnering. Both MIT and EMC recognize this as a critical new area of knowledge required by future graduates and industry managers. This partnership is also expanding into the areas of continuous learning and distance education. It addresses in particular how parts of the MIT curriculum can be made available to a wide audience of EMC employees. 3.5 Develop for the Long Term Knowledge supply chains can exist for only one transaction, or they can be developed and used for multiple transactions. However, experience with material supply chains indicates that their effectiveness increases as the partnerships strengthen through experience. As the partners work with each other, they grow in their ability to communicate and understand each others core competencies, to reduce or eliminate the barriers of behavioral and cultural difference, and to leverage the experience and tacit knowledge gained in past interactions. Wherever possible, it is valuable to establish supply chains that can be used for extended periods and for multiple knowledge needs.
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3.6 Share Best Practices With Other Knowledge Supply Chains Critical-mass change only comes when there is sufficient documented practical proof to justify the change. The best way to generate that proof is for the working prototype supply chain partners to share their experience and results to establish a set of best practices. It is important that as companies engage in knowledge supply chains, they reach out to other organizations who also use such chains so that all can benefit from their separate experience. For example, 14 universities who have established programs with industry partners focused on manufacturing recently formed a coalition the National Coalition for Manufacturing Leadership (NCML) to develop and share their best practices. In essence, each program represents a working prototype of a knowledge supply chain focused on Big M manufacturing. These 14 programs partner with over 100 different industrial companies. The coalition meets several times a year to share knowledge on research, curriculum, the needs of industry, industrial internships, distance education, and continuous learning for the total manufacturing workforce. There is a growing number of emerging knowledge supply chains that can serve as a base for providing that proof. They are working prototypes to the extent that they involve expanding partnerships, often between multiple companies and academia that are dedicated to the generation and transfer of knowledge vital for our economic security and the continuous upgrading of our total workforce. The following examples demonstrate the wide diversity and focus of these new knowledge supply chains. Leaders for Manufacturing An example of one such working prototype is MITs Leaders for Manufacturing (LFM) graduate education program. LFM is typical of the kind of partnerships represented in the coalition. This program is a partnership of 15 manufacturing companies and MIT that is motivated by the shared belief that excellence in manufacturing is critical to meeting the economic and social needs of individuals, firms, and society. Specifically, the vision of LFM is to discover and translate into teaching and practice principles that produce worldclass manufacturing and manufacturing leaders. Clearly, LFM has all the elements of a true knowledge supply chain. It has a unifying vision that depends on the research and educational processes of both industry and academia to generate new knowledge and distribute that knowledge with the purpose of improving the social and economic well-being of the larger society. LFM achieves a number of benefits for its partners: 1. It provides new graduates who are better prepared to serve our manufacturing companies. 2. It reduces on-site operating costs through faculty-supported internships. 3. It unites industry and MIT researchers on industry-defined projects. 4. It develops new programs for extended education. 5. It stimulates a new flow of research and education funds into a university. However, this effective prototype has yet to fully recognize itself as a true supply chain, and consequently it is only slowly and randomly putting into place the complete set of supply chain management principles that will allow the partnership to realize its full potential. For example, LFM is still limited by the industry and university barriers of intellectual property and reward and recognition systems that do not value time spent working with the other partners. Siemens Apprentice Program Siemens U.S., together with its operating companies, is developing an apprenticeship program for use in the United States, adapted from the German Siemens AG model. This program acts as a knowledge supply chain in the following manner: 1. It develops vocational/technical skills upgrade programs together with operating companies existing workforces.
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2. It procures financial support from public institutions and provides appropriate technical support for community education programs. 3. It provides technical advice and develops integrated processes with community colleges, local high school education resources, and partner production facilities. 4. It trains the operating facilities on how best to use the apprenticeship program and the graduates. 5. It conducts evaluation and performance reviews. 6. It cooperates with and learns from the Siemens AG training program in Germany and others throughout the world. The Athletic Knowledge Supply Chain This example is provided to stimulate thinking about the many types of knowledge systems that currently exist. While this system does not, by definition, regard itself as a knowledge supply chain, it does practice many of the qualities that are at the core of a good knowledge transfer system. As working prototypes seek partners for sharing best practices, it is helpful to consider some examples outside their current comfort zone. The larger athletic system has demonstrated that skills as well as wisdom can migrate down the education and training sequence. The skills of todays advanced high school athletes approach or exceed the level of the average professional athlete of 30 years ago. The athletic system is very conscious of its supply or feeder system. Regarding the athletic system as a knowledge supply chain and researching how the athletic knowledge process works, allows us to draw on the learning and best practices of this process to improve more traditional education and training systems. The following are examples of where the traditional knowledge supply chain might learn from the athletic knowledge process. 1. Most of the athletic teachers are experienced practitioners. 2. The media makes athletic skills highly visible and in so doing, helps to transfer knowledge and to teach the skills and their value. This visibility also enhances the individuals perception of what is exciting about the job, which further motivates him to want to learn to increase his skills. 3. The importance of work-based learning is realized, which is gained through the drills and application of new knowledge and skills during regular practices. 4. Competition is about winning, but it is based on cooperation and sharing of knowledge so that the standards of excellence (world records) of the sport can be expanded. 5. The need to adapt quickly and apply new knowledge is needed to be competitive; teams must change their game plans at half time. 6. There are parallels between athletics and apprenticeship programs. The intent of the next phase of the KSC imperative is to develop and categorize the learning, best practices, and benefits that these and other prototype knowledge supply chains are achieving. However, the most important next step is for companies, academia, and communities to start to use knowledge supply chains to address current real needs indicated by their knowledge shortages. 3.7 The Importance of Naming and Doing Knowledge Supply Chains The dilemma of waiting to adopt a new paradigm until it has been proven, is that once it is proven it is no longer new. New knowledge supply chains will parallel the development process that was common in the early years of material supply chains. It took time for the new forms of trust and respect to develop between the various suppliers and customers of the material process. The changes and the benefits came irregularly. It took a number of years before industry recognized and named the whole process as an integrated supply chain. With that naming, however, came an expectation and a commitment to achieve the new levels of performance that could only be provided by this seamless process. Once industry saw and treated the process as one
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system, it expected and demanded that new levels of excellence would be achieved. The benefits of material supply chains became self-fulfilling prophecies. With that history and learning, we must recognize the importance and potential of the knowledge supply chain. It is important to name it, and in so doing, increase the collective expectations and demands of what a knowledge supply chain can provide. Economic security depends on knowledge, and knowledge depends on the ability to create a closer partnership between all the institutions and individuals who are involved in a knowledge process. With a total partnership, all stakeholders will thrive; industry, academia, and the individual will expand their potential; and the nation will ensure its leadership in the emerging knowledge-based global economy.
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4.0 ACTION PLAN RECOMMENDATIONS Realizing the potential of supply chain management principles to benefit knowledge development, acquisition, and management processes requires that government, academia, industry, and individual companies work together to lay the foundation for development and implementation. The NGM Project team has identified five key actions, discussed below, that are required to begin this evolution. 1. Publicize the benefits and practicality of knowledge supply chains. The simplicity and practicality of knowledge supply chains is that they are immediately do-able. Therefore, the most important action plan is to get companies, communities, academic institutions, and individuals to start developing and using them. Then, as was the case with material supply chains, this activity of doing will stimulate and support other necessary actions in research, sharing of best practices, elimination of historic barriers, and building of trust between knowledge partners. This action plan requires the documentation and publication of the importance, feasibility, and benefits of knowledge supply chains. This documentation would include the development and use of knowledge supply chains for the generation and transfer of good knowledge process practices. This would parallel the development of centers, consortia, and associations that are being developed and used by other forms of supply chains. Part of this process will be to coordinate with and leverage from similar efforts of the material and technological supply chains. 2. Document best practices of working prototype knowledge supply chains. While LFM and Siemens serve as working prototypes, this action requires expanding the documentation process to include working prototypes that cover all aspects of the K-80 education and training process for all skill levels, from entry level to senior executives. This documentation must also include knowledge supply chains focused on the range of knowledge generation in both hard and soft technologies that impacts products, processes, and services. A key part of this action is to engage and learn from non-traditional knowledge systems. Examples are work-based learning apprenticeship programs and the athletic knowledge process. 3. Document the best practices of industry and academic partnerships. The ultimate success of many knowledge supply chains will depend on development of strong, trust-based partnerships between industry and academia. This requires an improved understanding of each others needs and cultures, and development of new reward and recognition systems that encourage and support such partnerships. The best practices must once again embrace the full range of research and education/training partnerships to meet the needs of the total workforce and workplace. 4. Apply the research from related fields that will expand the effectiveness and efficiency of knowledge supply chains. Key areas for study and integration of results include: Material and technology supply chains Learning organizations Principles of knowledge generation Tacit knowledge Documentation and transfer of tacit knowledge Athletic knowledge supply chains.
5. Support research that quantifies knowledge assets and benefits Engage in research that improves the ability to quantify the investments and benefits of R&D and education and training. This will help provide practical, bottom-line justification to stimulate organizations to enhance their knowledge processes and engage in knowledge supply chains. Specific research areas include: The long- and short-term benefits from education and training The long- and short-term benefits from research and development Identifying, quantifying, and measuring improvements in knowledge assets.
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5.0 SOURCES Supply Chain Management

1. 2. 3. 4. Building Supply Chain Relationships, International Journal of Physical Distribution, v24 n3, 1994, pp. 43-44. Arntzen, Bruce C., Gerald G. Brown, Terry P. Harrison, and Linda L. Trafton, Global Supply Chain Management at Digital Equipment Corporation, Interfaces, v25 n1, Jan/Feb 1995, pp. 69-93. Baatz, E.B., The Chain Gang, CIO, v8 n19, Aug 1995, pp. 46-52. Bleakley, Fred R., Strange Bedfellows: Some Companies Let Suppliers Work on Site and Even Place Orders; Both Sides Can Save Money but Run Serious Risks of Conflicts of Interest; Much Data No Longer Secret, The Wall Street Journal, 13 Jan 1995, Sec A, p. 1. Canna, Elizabeth, Harnessing the Giants: Asea Brown Bovari, American Shipper, v36 n5, May 1994. Christopher, Martin, Logistics and Supply Chain Management, New York, Irwin Professional Publishing, 1994. Cooper, Martha C., and Lisa M. Ellram, Characteristics of Supply Chain Management and the Implications for Purchasing and Logistics Strategy, The International Journal of Logistics Management, v 4 n2, 1993. Cote, Quentin P., Process Handbook Application: Supply Chain Management at Emerson Hospital, 1994, Thesis (M.S.) - Massachusetts Institute of Technology, Sloan School of Management. Dean, J.W., Jr. and G.I. Susman, Organizing for Manufacturable Design, Harvard Business Review , Jan-Feb 1989, v67 n1, pp. 28-36. Dyer, Jeffery H., Improving Performance by Transforming Arms-Length Relationships to Supplier Partnerships: The Chysler Case, Working paper, University of Pennsylvania, 1996. Ellram, Lisa, and Martha C. Cooper, Supply Chain Management, Partnerships, and the Shipper-Third Party Relationship, Working Paper, Ohio State University, 1990. Gilpin, Bryan Clark, Management of a Supply Chain in a Rapid Product Development Environment, 1995, Thesis (M.S.) - Massachusetts Institute of Technology, Dept. of Electrical Engineering and Computer Science, and Thesis (M.S.), Massachusetts Institute of Technology, Sloan School of Management. Hammel, Todd R., and Laura Rock Kopczak, Tightening the Supply Chain, Production and Inventory Management Journal, v34 n2, 2nd Quarter 1993, pp. 63-69. Heard, Ed, Quick Response: Technology or Knowledge? Industrial Engineering, v26 n8, Aug 1994, pp. 28-30. Henkoff, Ronald, Delivering the Goods, Fortune, v130 n11, 28 Nov 1994, pp. 64-78. Holmstrm, J., and N.P.H. Nielsen, Design for Speed: A Supply Chain Perspective on Design for Manufacturability, Computer Integrated Manufacturing Systems, v8n3, Aug 1995, pp. 223-228. Inger, Roger, Alan Braithwaite, and Martin Christopher, Creating a Manufacturing Environment That Is in Harmony with the Market the How of Supply Chain Management, Production Planning & Control, v6 n3, 1995, pp. 246-257. Lee, Hau L., Design for Supply Chain Management: Concepts and Examples, Perspectives in Operations Management: Essays in Honor of Elwood S. Buffa, Boston, Kluwer Academic Publishers, 1993, pp. 45-66. Lee, Hau L., and Corey Billington, Managing Supply Chain Inventory: Pitfalls and Opportunities, Sloan Management Review, v33 n3, Spring 1992, pp. 65-73. Lee, Hau L., and Corey Billington, The Evolution of Supply-Chain Management Models and Practice at HewlettPackard, Interfaces , v25 n5, Sept-Oct 1995, pp. 42-63. Levenick, Stuart L, Strategies to Improve Supply Chain Integration Between Manufacturing and the Marketplace, 1995, Thesis (M.S.) - Massachusetts Institute of Technology, Sloan School of Management. Levy, David, International Sourcing and Supply Chain Stability, Journal of International Business Studies , v26 n2, 2nd quarter 1995, pp. 343-360. MacMillan, John M., Principles of Point-of-Use Storage, Production and Inventory Management Journal, v34 n4, 4th Quarter 1993, pp. 53-55. McConnell, Steve, The Knowledge Supply Chain Letter to William Hanson, July 1996.
5. 6. 7. 8. 9. 10. 11. 12.
13. 14. 15. 16. 17.
18. 19. 20. 21. 22. 23. 24.
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25. Moskal, Brian S., Logistics Get Some Respect, Industry Week, v239 n12, 18 June 1990. 26. Nayak, P. Ranganath, Ketteringham, John M., Break Throughs , How Leadership and Drive Create Commercial Innovations That Sweep the World, 1994. 27. Quinn, James Brian, Intelligent Enterprise, The Free Press, Macmillan, Inc, 1992. 28. Turner, J.R., Integrated Supply Chain Management: Whats Wrong With This Picture? Industrial Engineering, v25 n12, Dec 1993, pp. 52-55. 29. Udo, Godwin, The Impact of Telecommunications on Inventory Management, Production and Inventory Management Journal, v34 n2, 2nd Quarter 1993. 30. Womack, James P., Daniel T. Jones, and Daniel Roos, Coordinating the Supply Chain, The Machine That Changed the World: The Story of Lean Production, New York, Rawson Associates, 1990, pp. 138-168. 31. A World Without Jobs? The Economist, 11 Feb 1995. 32. United Technologies Stock to Be Education Incentive, Wall Street Journal , 15 Dec 1995, CD-ROM, Access No. 9512150050. 33. Baker, George A. III, John E. Roueche, Robert R. Rose, Shared Vision, Transformational Leadership in American Community Colleges, Washington, D.C., Community College Press, April 1989. 34. Basili, Victor R., and Gianluigi Caldiera, Improve Software Quality by Reusing Knowledge and Experience, Sloan Management Review, Vol 37 n 1, Fall 1995, pp. 55-64. 35. Black, Sandra E., and Lisa M. Lynch, Human-Capital Investments and Productivity, AEA Papers and Proceedings, May 1996. 36. Cheng, Joseph L.C, Notes on the Concept of Universal Knowledge in Organizational Science: Implications for Cross-National Research, Management Science, v40 n1, Jan 1994. 37. Cohen, Wesley M., and Daniel Al Levinthal, Absorptive Capacity: A New Perspective on Learning and Innovation, Administrative Science Quarterly, v 35, 1990, pp. 128-152. 38. Cohen, Wesley M., and Daniel Al Levinthal, Fortune Favors the Prepared Firm, Management Science, v40 n2, Feb 1994. 39. Henkoff, Ronald, Companies That Train Best, Fortune, 22 March 1993, pp. 62-75. 40. Kelly, Kevin, and Peter Burrows, Motorola: Training for the Millennium, Business Week, 28 Mar 1994. 41. Leonard-Barton, Dorothy, Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation, Boston, Harvard Business School Press, 1995. 42. Levy, Frank, Richard J. Murnane, and Li Jian Chen, Education and Skills for the U.S. Workforce, June 1993, MIT Working Paper, MIT 93-007 WP. 43. Lyles, Marjorie A., and Charles R. Schwenk, Top Management, Strategy and Organizational Knowledge Structures, Journal of Management Studies, v29 n2, March 1992. 44. Lynch, Lisa, Strategies for Workplace Training, Washington, Economic Policy Institute, 1993. 45. McLaughlin, Alan S., Partners in Manufacturing Education (P.I.M.E.) Status Report December 1995. 46. Nonaka, I., and H. Takeuchi, The Knowledge-Creating Company, New York, Oxford UP, 1995. 47. Partnerships Advancing the Learning of Mathematics and Science, Department of Education, Commonwealth of Massachusetts, (PALMS), A National Science Foundation Statewide Systemic Initiative, Mid Point Report, 9 December 1994. 48. Perelman, Lewis J., Schools Out, Avon Books, October 1993. 49. Roe, Mary Ann, Education and U.S. Competitiveness, IC2 Institute, University of Texas at Austin, October 1989. 50. Savage, Charles M., 5th Generation Management, Co-Creating Through Virtual Enterprising, Dynamic Teaming, and Knowledge Networking, 1990. 51. Senge, Peter M., The Fifth Descipline, The Art & Practice of The Learning Organization, August 1990. 52. Siemens Corporation, Vocational and Technical Training, Training for Success, Why Siemens Believes in School to Work, May 1995. 53. Silbereisen, Rainer K., Eberhard Todt, Adolescence in Context The Interplay of Family, School, Peers, and Work in Adjustment, Chapter 13, Springer Verlag, 1994.
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54. Sloan, Allan, The Hit Men, Newsweek, 26 Feb 1996, pp. 44-48. 55. Spender, J.C., Organizational Knowledge, Learning and Memory: Three Concepts in Search of a Theory, Journal of Organizational Change Management, v9 n1, 1996. 56. Stuart, Thomas A, Brainpower, Fortune, 3 June 1991, pp. 44-60. 57. Department of Education, Office of Educational Research and Improvement, 58. NCES 94-115, National Center for Education Statistics, Digest of Education Statistics, 1994. 59. U.S. National Center for Educational Studies, Digest of Education Statistics, Annual. 60. U.S. National Science Foundation, National Patterns of R&D Resources, Annual. 61. Vischer, Jacqueline C., Strategic Work-Space Planning, Sloan Management Review, Vol 37 n1, Fall 1995, pp. 33-42. 62. Wiggenhorn, William, Motorola U: When Training Becomes an Education, Harvard Business Review , Jul/Aug 1990. 63. Zander, Udo, and Bruce Kogut, Knowledge and the Speed of the Transfer and Imitation of Organizational Capabilitites: An Empirical Test, Organization Science, v6 n1, Jan/Feb 1995.
Education, Knowledge Supply Chains, and Training

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Current Labor Statistics: Labor Force Data, Monthly Labor Review, Jan/Feb 1996. The 100 Largest U.S. Multinationals, Forbes , Annual. AFL-CIO Committee on the Evolution of Work, The New American Workplace: A Labor Perspective, February 1994. Bartel, Ann, Productivity Gaines From the Implementation of Employee Training Programs, Working Paper, no. 3893. Cambridge, MA, National Bureau of Economic Research, 1992. Bartlett, Christopher A., Sumantra Ghoshal, Rebuilding Behavioral Context: Turn Process Reengineering into People Rejuvenation, Sloan Management Review, Vol 37 n1, Fall 1995, pp. 11-23. Bishop, John H., The Impact of Previous Training on Productivity and Wages, Training and the Private Sector, ed. Lisa M. Lynch. Chicago, University of Chicago Press, 1994. Cohen, Stephen, S., and John Zysman, Why Manufacturing Matters: The Myth of the Post-Industrial Economy, California Management Review, Vol. 29 n 3, Spring 1987, pp. 9-26. Connor, Elizabeth, Will Our Human Resources Measure Up? HRFOCUS, Oct 1995. Council of Competitiveness, Competitiveness Index 1996, A Ten-Year Strategic Assessmen, Council of Competitiveness, Human Resources Competitiveness Profile, April 1995. Davis, Steven J., John Haltwanger, and Scott Schuk, Small Businesses and Job Creation: Dissecting the Myth and Reassessing the Facts, Business Economics, Vol 29 n3, July 1994, pp. 13-21. Drucker, Peter F, Post-Capitalist Society, 1993. Enos, Gary, States Innovate Spectrum of Strategies to Lure Manufacturing Jobs, Industry Week, v243 n8, 18 Apr 1994, p. 39. Flint, Jerry, The Myth of U.S. Manufacturings Decline, Forbes , v151 n2. 18 Janb 1993, pp. 40-41. Fullerton, Howard N., Jr., The 2005 Labor Force: Growing, but Slowly Monthly Labor Review, Nov 1995. Greiner, Mary, Christopher Kask, and Christopher Sparks, Comparative Manufacturing Productivity and Unit Labor Costs, Monthly Labor Review, Feb 1995. Harris, T. George, The Post-Capitalist Executive: An Interview With Peter F. Drucker, Harvard Business Review, May-June 1993, pp. 115-122. Hatter, Victoria L, The Behavior of U.S. Export Prices and Profit Margins 1981-1986, New York, Committee for Economic Development, 1988. Jasinowski, Jerry J., Improving the Economic Condition of the American Worker, White Paper, Washington DC, The Manufacturing Institute, 1996. Jobs For The Future, Redefining Corporate Responsibility in a Global Economy, February 1996.
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21. Kochan, Thomas A., The American Corporation as an Employer: Past, Present, and Future Possibilities, The American Corporation Today, New York, Oxford UP, 1996. 22. Krugman, Paul R., Robert Z. Lawrence, Trade, Jobs and Wages, Blaming Foreign Competition for U.S. Economic Ills Is Ineffective, The Real Problems Lie at Home, Scientific American, April 1994. 23. Kutscher, Ronald E., Summary of BLS projections to 2005, Monthly Labor Review, Nov 1995. 24. Kuttner, Robert, Needed: A Two-Way Social Contract in the Workplace, Business Week , 10 July 1995, p. 22. 25. Lerman, Robert I., The Future of Work and Implications for Training Policy, 26. The Urban Institute and American University, A Keynote Speech Delivered at TEC National Council Learning for Life Conference, September 4, 1996. 27. Meckstroth, Daniel J., Reengineering U.S. Manufacturing: Implications of Structural Changes in the U.S. Economy, Business Economics, v29 n3 July 1994, pp. 43-49. 28. Michigan Future, Inc., Crossing to the New Economy, Citizens Vision for a Prosperous Michigan, Current draft, May 1996. 29. National Center on the Educational Quality of the Workforce, First Findings From the EQW National Employer Survey, Philadelphia, PA, University of Pennsylvania, 1995. 30. National Center on the Educational Quality of the Workforce, The Other Shoe: Educations Contribution to the Productivity of Establishments, Philadelphia, PA, University of Pennsylvania, 1995. 31. National Coalition for Advance Manufacturing, U.S. Industrial Strength for the 21st Century, White Paper, Washington DC, NACFAM, 1995. 32. National Science Board, Science & Engineering Indicators - 1991, Government Printing Office, NSB 91-1. 33. National Science and Technology Council, Committee on Technological Innovation, Report of the Subcommittee on Manufacturing Infrastructure, Draft, 20 August 1996. 34. Padmanabhan, V., and Png, I.P.L., Returns Policies: Make Money by Making Good, Sloan Management Review, vol 37 n1, Fall 1995, pp. 65-72. 35. Pritzher, Robert, "We Need Government on Our Team, Industry Week, v243 n10, 16 May 1994, p. 43. 36. Research and Policy Committee of the Committee for Economic Development, American Workers and Economic Change, New York, Committee for Economic Development, 1996. 37. Rifkin, Jeremy, The End of Work: The Decline of the and the Dawn of the Post-Market Era, New York, GP Putnams Sons, 1995. 38. Sachs, Jeffrey, and Larrain B. Felipe, Macroeconomics in the Global Economy, New York, London, Harvester Wheatsheaf, 1993. 39. Salzman, Harold (Jobs For The Future), Paul Osterman (Sloan School of Management, MIT), Robert Lerman (The Urban Institute), Corporate Restructuring, Skill Formation, and Earnings Inequality, October 20, 1995. 40. Shelley, Kristina J., More Job Openings - Even More New Entrants: The Outlook for College Graduates, 1992-2005, Occupational Outlook Quarterly, Summer 1994. 41. Silvestri, George T., Occupational Employment to 2005, Monthly Labor Review, November 1995. 42. Suarez, Fernando F., Michael A. Cusumano, Charles H. Fine, "An Empirical Study of Flexibility in Manufacturing, Sloan Management Review, Vol 37 n 1, Fall 1995, pp. 25-32. 43. The World Bank, Workers in an Integrating World, Washington D.C., The World Bank, 1995. 44. Thurow, Lester, Head to Head, The Coming Economic Battle Among Japan, Europe, and America, 1992. 45. Thurow, Lester, The Future of Capitalism, How Todays Economic Forces Shape Tomorrows World, 1996. 46. United States Bureau of the Census, Statistical Abstract of the United States 1995: The National Data Book, New York, Bernan Associates, 1995. 47. United States Dept. of Commerce, Dept. of Labor, Commission on the Future of Worker-Management Relations, Fact Finding Report, Washington, GPO, 1994. 48. United States Dept. of Commerce, Dept. of Labor, Commission on the Future of Worker-Management Relations, Report and Recommendations, Washington, GPO, 1994.
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49. United States Dept. of Labor, Bureau of Labor Statistics, Employment Outlook: 1994-2005, Washington, GPO, 1995. 50. United States Dept. of Labor, Bureau of Statistics, The American Work Force: 1992-2005, Washington, GPO, 1994. 51. United States Dept. of Labor, Employment and Training Administration, Economic Change and The American Workforce, Research and Evaluation Report Series 92-B, 1992. 52. Weidenbaum, Murray, A Neglected Aspect of the Global Economy: The International Handicap of Domestic Regulation, Business Economics, v30 n2, Apr 1995, pp. 37-40. 53. Weiss, Andrew, Productivity Changes Without Formal Training, Training and the Private Sector, ed. Lisa M. Lynch, Chicago, University of Chicago Press, 1994.
Roadmaps
1. 2. 3. 4. 5. 6. Building a Standards-Based School System: Report of the Education Subcouncil, Reports of the Subcouncils, Washington, D.C., Competitiveness Policy Council, 1993. Building High-Performance Workplaces: Report of the Training Subcouncil, Reports of the Subcouncils, Washington, D.C., Competitiveness Policy Council, 1993. Forging the Future: Report of the Manufacturing Subcouncil, Reports of the Subcouncils, Washington, D.C., Competitiveness Policy Council, 1993. Technology Policy for a Competitive America: Report of the Critical Technologies Subcouncil, Reports of the Subcouncils, Washington, D.C., Competitiveness Policy Council, 1993. Allen, Dell K., Performance Objectives for Production Engineering Education, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Dearborn, MI, SME, 1995. Altan, Taylor, Restoring the Essence of Competitiveness: Engineering Education in Manufacturing, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix L, Dearborn, MI, SME, 1995. Bommer, M.R.W.; R.E. Janaro, D.C. Luper, Manufacturing Strategy Model for International Technology Transfer, Technical Forecasting and Social Change, Vol.39 n 4, July 1991, pp. 377-390. Clarke, Marcus A., Industrial Demands on Engineering Graduates, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix M, Dearborn, MI, SME, 1995. Committee for the Study of the Causes and Consequences of the Internationalization of U.S. Manufacturing; Manufacturing Studies Board; Commission on Engineering and Technical Systems; National Research Council (eds.) The Internationalization of U.S .Manufacturing: Causes and Consequences, 1st ed., Washington D.C., National Academy Press, 1990, p. 65. Council on Competitiveness, Roadmaps for Results: Trade Policy, Technology, and American Competitiveness, Washington D.C., Council on Competitiveness, July 1993. Deloitte & Touche LLP Management Consulting, Aerospace & Defense Industry Study, Vision in Manufacturing: Planning for the Future, 1995. Deloitte & Touche LLP Management Consulting, Global High Technology and Electronics Industry Study, Vision in Manufacturing: Planning for the Future, 1994. Deloitte & Touche Tohmatsu International Manufacturing Consulting Services, Critical Success Factors for Global Competition, Vision in Manufacturing: Planning for the Future, Volume 1, 1993. Deloitte & Touche Tohmatsu International Manufacturing Consulting Services, Technology: Enabling, Differentiating and Integrating, Vision in Manufacturing: Planning for the Future, Volume 2, 1993. Deloitte & Touche Tohmatsu International Manufacturing Consulting Services, Infrastructure: The Metrics and the Action Programs, Vision in Manufacturing: Planning for the Future, Volume 3, 1993. Eagle, Paul. J., and Leo E. Hanifan, Greenfield: a New Concept in Manufacturing Engineering Education, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix F, Dearborn, MI, SME, 1995. Ebner, Merrill L, Manufacturing Engineering: Anticipating a New Century, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix I, Dearborn, MI, SME, 1995.
7. 8. 9.
10. 11. 12. 13. 14. 15. 16.
17.
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18. Gardiner, Keith M., and Sushil K. Malik, Industry Led Graduate Education: The Evolution of a Manufacturing Systems Engineering program, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix N, Dearborn, MI, SME, 1995. 19. Koska, Detlef K., and Joseph D. Romano, Countdown to the Future: The Manufacturing Engineer in the 21st Century, Dearborn, MI, SME, 1988. 20. Mathias, Elizabeth A, Analysis of National Surveys: Associate Degree Programs in Manufacturing Engineering and Related Programs, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix J, Dearborn, MI, SME, 1995. 21. Merkel, Kenneth G., and Kamlakar P. Rajurkar, The Case for Practice-Oriented Masters Degrees in Manufacturing Education, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix O, Dearborn, MI, SME, 1995. 22. Miller, Edward A., The 21st Century Education Paradigm: Meeting the Needs of a Globally Competitive U.S. Manufacturing Sector, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix K, Dearborn, MI, SME, 1995. 23. Office of Technology Assessment, Congress of the United States, Technology and the American Economic Transition, May 1988, OTA-TET-284. 24. SME, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, SME, Dearborn, MI, 1995. 25. Worthley, Warren W., A View of the Twenty-First Century For Manufacturing Engineering Technology, Manufacturing Education for the 21st Century; Volume 1: Curricula 2002 Report, Appendix H, Dearborn, MI, SME, 1995.
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Appendix 1 How Knowledge Supply Chains Enable NGM Attributes The Next-Generation Manufacturing company is strongly influenced by the generation, development, transfer, and use of new knowledge. Listed below are specific examples of how knowledge supply chains impact relevant NGM drivers and attributes. NGM Drivers Rising Global Standard of Living The growth in the standard of living in both developed and developing countries is a function of the effective and timely shift of lower-skilled, lower-wage-valued jobs to developing countries so that developing countries have the capital and the need to buy the products and services provided by the higher-skilled, higher-wagevalue jobs of the developed countries. KSCs will improve the knowledge process that is required to develop the new products and services that support higher-wage/higher-skilled jobs. They will improve the transfer of the knowledge and skills required to educate and train the workforce for these high-level jobs and help manage the transition of jobs and skills between developed and developing countries. Increasing Rate of Technological Change Education and training processes must ensure that the workforce is able to stay abreast of the new knowledge and skills required to support and capitalize on new technologies. It is estimated that the current rate of technological change is causing individuals knowledge and skills to become obsolete at a rate approaching 20% per year. Given that a knowledge supply chain will improve both the quality of knowledge transfer and shorten the transfer time, KSCs will be a critical tool in keeping individuals and organizations current with new technology. Increasing Need to Manage and Protect Scarce Resources KSCs will enhance the process that generates the new knowledge and develops the new processes that: Protect, recycle, and renew scarce resources Reduce the time and investment to extract these resources Reduce the waste from misusing these resources Measure long-term costs associated with mismanagement of scare resources Educate and train people in the skills required to effect resource-preservation processes. Increasingly Demanding Stakeholder Needs The ability to know and meet the needs of the stakeholder depends on a knowledge process that integrates the explicit and implicit needs of the stakeholder with the external and tacit knowledge about the current and future capabilities of the provider who can meet those needs. KSCs can not only improve the efficiency and effectiveness of this knowledge process, they aid in expanding the process to include all relevant knowledge sources.
A-1
NGM Attributes Customer Responsiveness KSCs support understanding the true needs of the customer. They enhance the enterprises ability to have a more highly skilled, flexible workforce that is able to adjust quickly to the ever-changing needs of the customer. Physical Plant and Equipment Responsiveness KSCs can improve the smartness of capital equipment by providing an integrated process to identify and embed in the equipment the appropriate explicit and tacit knowledge of the equipment designers and operators, with the system knowledge of the needs of the user environment. Human Resource Responsiveness KSCs can enhance the ability of all levels of the enterprises workforce to contribute to increasing innovation and productivity. They can improve the total knowledge process, which is the key to increasing the human potential of every member of the workforce and increasing the enterprises ability to capitalize on the human as its most flexible and most significant value-adding asset. KSCs serve all members of the extended workforce and embrace K-80 education, which in turn supports and fosters lifelong learning and facilitates lifetime employability. The development of a better-trained workforce increases the enterprises ability to optimize its workforce turnover in a way that satisfies the needs of all stakeholders. KSCs significantly improve the ROI of an enterprises knowledge investments by reducing the cost of its total knowledge process (generation, development, transfer, use) by greater than 20%, while increasing the timeliness and effectiveness of that knowledge by greater than 50%. Like material supply chains, KSCs integrate and seek to optimize all the tiers of the knowledge supply process, for example, by engaging the K-12 tier to educate future employees about the future good opportunities in manufacturing, and by educating students about the skills required to take advantage of these opportunities. KSCs will facilitate the total educational supply tier to migrate skills down the education and training echelons. This will enable the future workforce to be better skilled and better prepared by providing a range of work-based learning alternatives that supplement or replace higher education. Global Market Responsiveness KSCs will aid in the growth of the world economy by enabling individuals to move up the skill ladder more quickly and be better prepared to contribute to product and process innovation. Teaming as a Core Competency To be effective, KSCs must begin by solidifying trust and interdependence between the organization and the individual, whereby the organization provides the tools of production (capital, equipment, infrastructure, information), and the individual provides the means of production (knowledge and skills). KSCs depend on understanding and capitalizing on how this core partnership works, and adapting that knowledge to the other partners of the KSC. KSCs will improve the enterprises ability to secure and use the knowledge of their core competencies, without needing to have those core competencies under their physical control and ownership.
A-2
Responsive Practices and Culture KSCs can increase the discretionary effort of individuals by making them more knowledge- and skill-secure, directly influencing the quality, output, and responsiveness with which they perform their tasks. KSCs can aid in the distribution of productivity and innovation-producing skills throughout the total workforce by moving these skills down the education chain. This empowering process allows the enterprise to effectively use each member of the workforce and maximize the time and effort it spends on innovation, while still ensuring competitive results in productivity. The National Science Foundations 1996 study that outlines the characteristics of the successful NextGeneration Manufacturer cites that lack of knowledge is the most frequent barrier to the future competitiveness of an enterprise. Specifically, lack of knowledge limits: A rising standard of living because the enterprise and its host country cannot maintain its competitive advantages in innovations, productivity, and responsiveness Individuals and organizations from remaining current with technology The responsiveness of the total workforce because individuals will not have necessary knowledge that allows them to be better skilled, more secure, more innovative, more flexible, and more supportive of change.
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A-4
Rapid Product/Process Realization

January 1997
Prepared By: The NGM Advanced Manufacturing Systems & Operations Thrust Team
CONTRIBUTORS Tom Young, Sandia National Laboratories, Team Leader Dick Engwall, Westinghouse Electric, Team Leader Sal Scaringella, Agility Forum, Lead Author Hector Gallegos, Massachusetts Institute of Technology, Leaders for Manufacturing Dick Hartke, National Center for Advanced Technologies Merrill Hessel, NIST Manufacturing Engineering Laboratories Keith Jessen, Rockwell-Collins Mary Jo Scheldrup, Rockwell-Collins Jim Jordan, Consortium for Advanced Manufacturing International Alec Lengyel, Agility Forum Gene Meieran, Intel Corporation Fred Michel, Society of Manufacturing Engineers Steve Ricketts, National Center for Manufacturing Sciences Tom Shaw, Andersen Consulting Daniel Shunk, CIMS and Argonne State University
In addition to the many contributions of U.S. industry, industry associations, and academic institutions, this publication is supported by the National Science Foundation under Cooperative Agreement No. DMI-9696175. Any opinions, findings, or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation, Department of Defense, Department of Energy, Department of Commerce, or other sponsoring organizations. Printed in the United States of America ii
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The NGM Framework

Global Drivers
iv

People
The NGM Company

vi

H L M H H H H M L M
H H H H H M L M M H
H L H H H M H H H H
H H H H H M M M H H

* H M M H M M H H H
H * M M
M M * H H
H H M * H
H M M H *
M M H H H
M M H M
H H
H H H
H H H
M - Medium Impact
vii
H H H M
Impact On
Change Management

H M M H H M L M H H
Global Drivers
viii

Investment/Finance
Technology
X X X X
X X X X X
X X
X X
X X X X X
X X X X X X X X X X
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Knowledge Supply
Product Life Cycle
Human Resources
Sourcing/Teaming
Environmental
Innovation
CONTENTS Executive Summary ....................................................................................................................................... 1 Introduction .................................................................................................................................................. 2 1.0 Imperative Definition ............................................................................................................................. 6 1.1 Background ...................................................................................................................................... 6 1.2 IPPD Management Strategy ........................................................................................................... 10 1.3 IPPD Methodology ........................................................................................................................ 10 1.4 IPPD Enabling Environment ......................................................................................................... 11 1.5 Other Considerations ..................................................................................................................... 12 2.0 Relationship To NGM Attributes ........................................................................................................ 16 3.0 Barriers ................................................................................................................................................ 17 4.0 Enablers ................................................................................................................................................ 18 4.1 Required Enablers........................................................................................................................... 18 4.2 Systematic Approach Using Integrated Product & Process Development ....................................... 19 4.2.1 Purpose .............................................................................................................................. 19 4.2.2 Traditional State of Application .......................................................................................... 20 4.2.3 Current State of Application ............................................................................................... 20 4.2.4 Emerging State-of-the-Art Extensions ................................................................................. 20 4.2.5 Pilots of Emerging State-of-the-Art Extensions.................................................................... 21 4.2.6 Future Stretch Goals ........................................................................................................... 22 4.3 Enterprise-Wide Integrated Computer Environment ..................................................................... 22 4.3.1 Purpose .............................................................................................................................. 22 4.3.2 Current State of Application ............................................................................................... 24 4.3.3 State of the Art/Best Practices .............................................................................................. 24 4.3.4 Emerging State-of-the-Art Extensions ................................................................................. 24 4.3.5 Pilots of Emerging State-of-the-Art Extensions.................................................................... 25 4.3.6 Future Stretch Goals............................................................................................................ 26 4.4 People/Culture-Related Issues......................................................................................................... 27 4.4.1 Purpose .............................................................................................................................. 27 4.4.2 Current State of Application ............................................................................................... 28 4.4.3 State of the Art/Best Practices .............................................................................................. 29 4.4.4 Emerging State-of-the-Art Extensions ................................................................................. 29 4.4.5 Pilots of Emerging State-of-the-Art Extensions.................................................................... 30 4.4.6 Future Stretch Goals............................................................................................................ 30 4.5 Integration of Systematic IPPD Methodology, Computer Environment, and People- and Culture-Related Enablers............................................................................................................... 31 4.5.1 Purpose .............................................................................................................................. 31 4.5.2 Traditional State of Application .......................................................................................... 31 4.5.3 Current State of Application ............................................................................................... 32 4.5.4 Emerging State-of-the-Art Extensions ................................................................................. 32 4.5.5 Pilots of Emerging State-of-the-Art Extensions.................................................................... 32 4.5.6 Future Stretch Goals............................................................................................................ 33
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CONTENTS (continued) 5.0 Action Plans ......................................................................................................................................... 34 5.1 Systematic Approach to RPPR........................................................................................................ 34 5.1.1 Develop Education & Training Module ............................................................................. 34 5.1.2 Develop Generic, Integrated, Robust Suite of Design Tools ................................................ 35 5.1.3 Establish Design for Affordability Rules ........................................................................... 35 5.2 Integrated Computer Environment (ICE) ...................................................................................... 36 5.2.1 Standards ............................................................................................................................ 37 5.2.2 Interoperable System ........................................................................................................... 38 5.2.3 Modeling & Simulation ...................................................................................................... 38 5.2.4 Identify and Synthesize Gaps and Redundancies, Then Prioritize ........................................39 5.3 People and Culture......................................................................................................................... 39 5.4 Integration of Systematic IPPD Methodology, Computer Environment, and People- and Culture-Related Issues ................................................................................................................... 40 6.0 Metrics.................................................................................................................................................. 42 6.1 Purpose........................................................................................................................................... 42 6.2 RPPR Metrics................................................................................................................................. 42 7.0 Sources ................................................................................................................................................. 44 Appendix Glossary ...................................................................................................................................A-1
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ACRONYMS & ABBREVIATIONS AI AIA AMS&O AM3 ASME AVE BAA BOM BPR CAD CAE CAI CALS CAM CASE CAT CCIT CE CIM CORBA DBT DARPA DDRE DOC DoD DOE EAMRI ECAD ECN EDI EIA EOC ERP GIT ICE IGES IMS IPD IPPD IPT artificial intelligence Aerospace Industries Association Advanced Manufacturing Systems & Operations Affordable Multi-Missile Manufacturing American Society of Manufacturing Engineers Agile Virtual Enterprise Broad Agency Announcement bill of material business process reengineering computer-aided design computer-aided engineering computer-assisted instruction Commerce at Light Speed computer-aided manufacturing computer-aided software engineering computer-aided testing Coordinating Committee on Industrial Technology Concurrent Engineering Computer Integrated Manufacturing Common Object Request Broker Architecture Design Build Team Defense Advanced Research Projects Agency Director, Defense Research & Engineering U.S. Department of Commerce U.S. Department of Defense U.S. Department of Energy Electronics Agile Manufacturing Research Institute electronic computer-aided design engineering change notice electronic data interchange Electronic Industries Association Engineering Operations Council Enterprise Resource Planning Georgia Institute of Technology Integrated Computer Environment Initial Graphics Exchange Specification Intelligent Manufacturing Systems integrated product development integrated product/process development integrated product team
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ISO JAST JDL JSF LAN MADM MEL MES MRI MRP MS&T NCAT NEISP NEMI NCMS NGM NGMS NII NIIIP NSTC NTU OEM OSD PDES PDM PDR PNGV R&D RPPR RASSP REMC RFP/RFQ ROI RPI SAIC SE SOW STEP TAT USAF WAN WWW
International Standards Organization Joint Affordable Strike Technology Joint Defense Laboratories Joint Strike Fighter local area network Multi-Attribute Decision Model NIST Manufacturing Engineering Laboratory Manufacturing Execution Systems magnetic resonance imaging manufacturing resource planning Manufacturing Science & Technology National Center for Advanced Technologies National Electronics Industry Sector Pilot Program National Electronic Manufacturing Initiative National Center for Manufacturing Sciences Next-Generation Manufacturing Next Generation Manufacturing Systems National Information Infrastructure National Industrial Information Infrastructure Protocols National Science & Technology Council National Technological University original equipment manufacturer Office of the Secretary of Defense Product Data Exchange using STEP Product Data Manager Preliminary Design Review Partnership for New Generation Vehicle research and development rapid product/process realization Rapid Application-Specific Signal Processors Research Engineering & Manufacturing Committee request for proposal/request for quote return on investment Rensselaer Polytechnic Institute Science Applications International Corporation Simultaneous Engineering statement of work Standard for Exchange of Product Model Data Thrust Area Team U.S. Air Force wide area network World Wide Web
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EXECUTIVE SUMMARY Rapid Product/Process Realization (RPPR) is an expected outcome that results from the integration of customer needs and wants, a systematic Integrated Product/Process Development (IPPD) methodology, crossfunctional Integrated Product Teams (IPTs), and a Computer-Integrated Environment (CIE). It is accomplished by including all stakeholders, from concept development through product disposition, in the design, development, and manufacturing process, in a highly concurrent manner. Why is it Important? A fast-to-market strategy is among the most important success factors for manufacturing companies. Past strategies have separated design from manufacturing, causing long lead times and costly product and process iterations. Present and emerging concepts aim at creating a highly integrated/concurrent environment in which manufacturing and all other disciplines strongly influence design decisions very early in the product realization process. Past strategies have performed well in reducing costs in the face of embedded costs due to design, numbers of parts, and expensive processes, which dictate that the majority of the product cost is determined early in the design process. Disjointed design, manufacturing, and business tools present a major barrier to companies ability to make the required decisions early in the process. RPPR methodologies and tools can help companies break through this barrier, providing greatly increased responsiveness to customer and market demands as well as tremendous cost savings. Key Concepts RPPR contains the elements to rapidly develop solutions by: Making the customer part of the development team Using a well-defined management systems strategy Using state-of-the-art interoperable information technology Using multi-disciplined teams trained in IPPD Maximizing use of the knowledge and expertise of its workforce Using metrics for control of the entire process. RPPR is achieved through use of advanced, integrated business, design, and manufacturing information and technology by empowered teams who conceive, design, develop, produce, and support effective and affordable solutions. Whats New? Integration of the customer and all activities in the conceptualization, creation, support, and disposal of a product in a rapid optimization, tradeoff-driven environment. A key enabler is creation of interoperable business, engineering, and manufacturing hardware and information systems to enable rapid tradeoff decisions to be made among performance, design features, and manufacturing costs. Mockups and actual testing will be replaced with rules-based design and performance modeling in simulation environments, both singly and in combination. Action Recommendations Specific actions to move to implement RPPR are as follows. The majority of these can be taken by individual companies or one or more companies working in partnership with industry associations, academic institutions, and government agencies. 1. Accelerate training and implementation of IPPD and IPT methodologies. 2. Develop a suite of integrated design tools that automate the optimization/tradeoff of performance, design, and manufacturing options. 3. Establish standards and tools to assure interoperability of design, business, and manufacturing tools. 4. Support maturation of emerging rapid prototyping capabilities, and the development of new solid, freeform fabrication techniques. 5. Support development and implementation of pervasive modeling and simulation capability.
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INTRODUCTION Rapid Product/Process Realization (RPPR) is a key imperative allowing a company to provide solutions to the customer proactively in an environment of rapidly changing economic and business conditions. RPPR is applicable to commercial as well as defense contractors and applies to companies of all sizes. RPPR is the result of using the following methodologies and tools across the product life cycle: Integrated Product/Process Development (IPPD) methodology Trained, multi-disciplinary Integrated Product Teams (IPTs) Interoperable and integrated Business, Engineering Design, and Manufacturing tools An Integrated Computer Environment (ICE) that facilitates conducting the process methodology in a highly concurrent manner.
The IPPD methodology provides, uses, and develops all the required information to conceive, design, develop, produce, and support effective, robust, affordable products and processes. It also provides inherent methods and techniques for their environmentally friendly manufacture and disposal at the end of their expected life cycle. The Integrated Product Team concept allows continuous and highly concurrent application of all the necessary disciplines and organizational elements, namely customer, marketing, engineering, manufacturing and customer support. They are all simultaneously and interactively involved in the design and development process and include the supply chain and various customer or team entities. Critical to the success of the IPTs is the careful selection of IPT leaders and participants. They must be trained in the principles of IPPD. They must have the motivation, reward systems, and attitude that are fundamental to successful IPTs. Interoperable And Integrated Business, Engineering Design, And Manufacturing Tools provide: The right information, in the right format, to the right people or equipment, at the right time, to make highly fact-based, informed decisions. The interconnected, linked information tools serve as enablers to accelerate the realization process, and significantly contribute to the generation of a robust, optimized product or process The means to identify quickly, assess, and respond to opportunities resulting from rapidly changing market conditions and customer needs The environment for IPTs including the customer, in-house organization, partners and the supplier chain, which, although physically separate, allows and urges them to participate in the design and development process in a highly concurrent, virtually co-located manner, and The ability to capture the design, associated analyses, and documentation for future modification or reuse. It is important to note that issues of design, development tools, and equipment interoperability continue and must be satisfactorily resolved if RPPR objectives are to be achieved. Companies that have many customers also have the dilemma of having to interface with each customers design tools. With large numbers of incompatible tools in the market place, design organizations are finding it necessary to purchase seats of their design tools and provide them to their supply chain for compatibility purposes or resort to translators, niche application solutions, or de facto standards to achieve acceptable levels of interoperability. The Integrated Computer Environment (ICE) is a critical enabler for a rapid and effective use of product and process information. ICE facilitates rapid creation and flow of information. It allows design and supporting analyses and documentation to be captured automatically as the design proceeds. For future reuse, ICE accelerates product reconfiguration and design modifications. What-if analyses are conducted more easily and quickly. For Integrated Project Team(s) working on initial designs, ICE facilitates members from all appropriate functional disciplines working together to reduce the development cycle by enabling acceler-
ated, fact-based decisions to be made at the right time. ICE supports a management system that promotes flexibility and mutual trust among the participants, that, in-turn, results in an accelerated, more cost-effective product development cycle. The development cycle is accelerated in that affected functional disciplines have the opportunity to influence the design as it evolves, rather than serially. RPPR operates across the Extended Enterprise . The design and development effort include as constant participants: the customer, the primary organization, its partners, and its supply chain. This highly concurrent environment facilitates a more productive, reduced development cycle time and maximizes the value of product and process tradeoffs, particularly those between product and process design variability. Time consuming and costly iterations that previously were conducted in series are minimized or eliminated. The ability to capture the initial design with its supporting analyses has the added benefit of allowing flexible reuse for rapidly creating reconfigurable derivative designs. In total, the business case for RPPR is that the resulting product realization cycle is expected to reduce cycle time by at least 50%-70%, use half the people, or less, and produce ROIs at least four times higher than the previous approach. Lowering manufacturing costs has its limits and the Lean Manufacturing initiative has about run its course. When the design has built-in cost in high numbers of parts and design complexity and requires processes that are either new, time consuming, or expensive, there is only so much an expert factory can do to minimize costs. In the 11 November 1996 issue of the Wall Street Journal, Toyota claims to have come to the end of the line with lean manufacturing and is putting more effort into releasing designs that would be cheaper to manufacture. Their latest car thus has 1/3 fewer parts. Honda and other Japanese manufacturers are also on this track as are the Big Three domestic auto producers. Figure I-1, below, depicts the relationship between product development phases and their ability to influence total life-cycle cost.
HHigh High Influence High Influence On Cost Conceptual Phase Little Influence
Less Influence Design & Development Phase
Production Phase
Low Product Life Cycle
Operations & Support Phase
Figure I-1. Early decisions affect life-cycle cost the most. If being first to market is a strategic objective, RPPR assists with an optimized design solution and provides the opportunity to recover a larger part of the development investment cost. It also results in being further ahead on the learning curve when a competitive product is introduced. This critical integration process of the enterprise that results in RPPR includes: Synthesizing the processes of demand generation and fulfillment Using all relevant internal and external product/processes and market research to establish product portfolio composition and structure, and Employing the concomitant best practices and guiding principles to execute the design, development and manufacturing processes.
The entire development process is more cost-effective because of its favorable impact on the total product life cycle. This results from making cost driver decisions earlier rather than later in the development or manufacturing cycle, when the cost of change in both time and money are significantly higher. In total, an integrated process significantly shortens the time-to-market and facilitates developing the product right the first time. Further, being first or second to market, allows quicker recovery of initial investment costs and places the company further down the production cost improvement curve when competitors enter the market. This strategy allows the introduction of next generation products while dropping prices on the original product, leaving competitors in a constant, chaotic catch-up mode as they try to recover their investments. The RPPR Imperative (Figure I-2), integrates all aspects of the voice of the customer and the IPPD methodology to provide an optimized product/process-solution that meets or exceeds customer expectations. NGM Companies, relying heavily on RPPR, will have significant strategic, tactical and operational impact on the way small, medium, and large companies with global operations operate, and in the products they will develop. The rapid acceptance, expansion and application of the Internet and Intranet will accelerate this process. The rate of change will result in an entirely different atmosphere or look of the NGM enterprise when compared to the traditional or legacy enterprise. Some of these differences include the changes listed in Table I-1. This paper highlights and summarizes examples of traditional and current state-of-the-art product development processes and practices, emerging trends or extensions of these practices, and identifies pilot programs and stretch goals to enhance the global competitive position of U.S. companies in product realization. Finally, this paper identifies recommended RPPR research and associated actions and plans to accelerate development of processes, practices, and other enablers to achieve the capability of the Next-Generation Manufacturing Enterprise.
Voice of Customer (Input) Methodology (Process) Customer Solution (Output) Products & Processes Short Cycle Time Right First Time Affordable Robust/Reliable Customerized Extraordinary Quality
Customer Requirements Target Price Expectations
IPPD Integrated Product Teams Customer In-House Partners Suppliers Systematic Methodology Integrated Computer Environment Virtual Co-location State-of-the-Art Tools
Customer Marketing Engineering Manufacturing Support Disposal Integrated Business, Engineering, Manufacturing, & Support Systems
Figure I-2. The RPPR Imperative
Table I-1. From Traditional to NGM

Today Product or services provider Sequential product development Sales, marketing and engineering control requirements and specifications Marketing and/or Engineering dictating design Minimum customer involvement with, typically, a one-time transaction Islands of domain-specific development tools Working individually (domain experts) Self-generated and controlled data Proprietary design systems Hard copy drawings, specifications, and requirements data Bureaucratic review/approval Optimized individual domain-specific (mechanical, electrical, thermal, environmental) CAE, CAD, CAM, CAT for simulating a part Design for specific performance attributes Narrow focus of design, processes, equipment, and tools Design for absolute tolerances Singular physical mock-up/prototype After-the-fact Quality Control Design confidence via physical testing Independent Flat File Information Systems Tomorrow
Life-cycle solutions provider Highly concurrent product development Incorporating all stakeholders up front in generation of requirements, specifications, and solutions Broad application of synthesis and design processes Customer as a team member with a long-term relationship Computer integrated environment Working in multi-disciplinary, cross-functional teams Common, shared enterprise data Standards-compliant systems Computer/electronic data Rapid decision-making practices and tools Optimized integrated domains at higher assembly levels Design for all performance and life-cycle attributes IPT evaluating and approving alternatives and designs involving all affected elements Design for probabilistic subsystem parameters Multiple, iterated electronic prototypes to choose best balanced alternative Closed-loop predictive process control allowing continuous adjustment Confidence via rules-based design and simulation/virtual testing Interoperable, distributed, but linked, Business, Design, and Manufacturing systems
1.0 IMPERATIVE DEFINITION 1.1 Background Being the first to market a new system or product successfully is a goal of most companies. For many, it is their enterprise discriminator in the ever-changing, increasingly competitive, and increasingly global market place. Being first to market is important because it allows a company to be recognized as the innovator, and generally puts the company in a controlling position to recover their R&D investment early through value pricing and other market positioning strategies. By pursuing a rapid new product introduction rate , a company further enhances its leadership position and retains control of the marketplace. By the time the competition attempts to rival the product with either a competing approach or a clone, the innovative company is ready to introduce its next generation product. Companies such as Intel and Hewlett-Packard have exploited this strategy very successfully. Past Practices Problems In the 1960-1980 period, a time-consuming process was required to bring either a new product to market or a new process into a manufacturable state. The product was designed, largely on paper, with high error rates. Once designed, the product was mocked-up or prototyped. In the mechanical world, a solid object was constructed out of cardboard, clay, wood or metal, and this object was viewed sequentially by all interested parties, who would comment or recommend changes. These changes resulted in more paper, more models, and more changes, as attempts were made to converge on an agreed-upon design. This process often took a long time: 5 years to bring a new automobile to market, 3 years for a new IC, 8 years for a new airplane, 15 years for a new power plant. As late as the early 90s, these lengthy cycle times were not seriously questioned. Further, these long development cycles did not include the extensive troubleshooting and debugging associated with new product introduction once the design was fully agreed to. It was not uncommon to spend additional years fixing the problems discovered after the product had entered the market, necessitating expensive recalls. Getting it right the first time was not expected. There were other expensive and time-costing delays as well. Customers were approached only after the product was mostly completed. Competitors were rarely talked to. Generally, the interpretation and enforcement of existing anti-trust legislation contributed significantly to this behavior. The companys Quality organizations were regarded as policemen, from whom to keep important information, not with whom to share it. The finance organizations were bean counters, viewed as non-responsive to either spending or saving money. Development groups, set up as silos, tossed new designs (which were frequently not manufacturable) over the transom to manufacturing organizations, who were expected to pick up this new product and make it easily and error free. Managers regarded workers as a commodity, as a pair of hands to do exactly what the manager wanted, and workers regarded management with disdain, thinking of them as slave drivers to be deceived and outwitted. A New Paradigm Emerges In the mid-1990s, a new enterprise environment began to evolve. Salient characteristics include: Competitors have become very aggressive. They will give customers what they want, when they want it. If they dont, someone else will. Companies have entered the age of globalization. Products are increasingly made where the customer lives, regardless of where the corporate headquarters is located. High quality is a given. Without product quality, there is no customer. Quality is an assumed, automatic requirement, demanded and expected of all products, and is therefore no longer a discriminator.
Mass customization is becoming a reality. Customers want to participate with manufacturers in design and creation of their customized product, but only pay mass-production prices. Suppliers of materials and parts have become partners with manufacturers, leading to the initial stages of global virtual enterprises. New technologies have become pervasive, and have led to new ways to design, develop, manufacture, distribute, and dispose of/recycle products. Products are designed as solutions on upgradeable platforms, designed to capture the customer as a long-term subscriber rather than as a one-time transaction. Communications technology has evolved, enabling anyone to communicate anything with anybody, anywhere, at any time. Companies are heavily engaged in collaborative work. Even competitors participate, some through multicompany organizations such as SEMATECH, CAM-I, and NCMS, and others on a one-to-one basis. Universities, once regarded only as fountains of technology and knowledge, are now educating and training people with operational, development, and manufacturing skills, using the newest techniques and newest technologies. Product life cycles are becoming shorter. Goals of 10x improvement in the next 5 years are common. As a result of rapid reverse engineering and easy access to information and suppliers, competitors enter the market more quickly than ever, unhindered by the burden of legacy systems and methods. The Next-Generation Manufacturing approach, driven by the competitive global environment and rising customer expectations, addresses most of the negative issues. It takes into account several important factors not previously believed relevant or possible, and builds upon an extensive body of research and experience that points towards much more efficient and effective methods and techniques. There are three Critical Success Factors in the NGM approach. Their degree of applicability will vary depending on the industry and company. Different market drivers and market positions will determine the extent to which they must be used. They include: First, Quality High product quality is mandatory and expected as a given. Nothing less is acceptable. Quality in the broadest sense is considered here, i.e., performance, style, durability, etc. Durability may not be sufficient to capture a market, but it is essential to stay in a market. Non-competitive quality equates to loss of market share. Meeting or exceeding customer expectations, including performance, product life-cycle cost and supportability, are essential to penetrating new markets. Second, Cost Cost must be competitive. Selling price is based upon customer-perceived value rather than cost-ofmanufacture-plus-profit. If the cost is low enough to provide a significant price advantage, one may capture a sizable part of a market. But in general, significant cost advantages are difficult to generate, since everyone has access to essentially the same equipment, materials, processes and information, anywhere in the world. Third, Time Since quality and cost are more mature in terms of traditional objectives, time to bring the product to the customer faster than the competition is the remaining discriminator: design the product and develop processes quicker, manufacture quickly, and get it in the customers hands before the competition. This strategy will capture market share at a time when there is most financial and market position benefit, i.e., when demand is high, and investments can be recovered more successfully while prices are high. Integrated Product/Process Development (IPPD) is the primary process methodology designed to win market share through its ability to help a company create new and better products more quickly than its competition. IPPD denotes a more inclusive representation of the development process than do the earlier terms of Concurrent Engineering, Simultaneous Engineering or Integrated Product Development. IPPD achieves this
primarily through its focus on balanced cost/performance objectives and balanced product and process variability as the design proceeds. RPPR is the overarching objective that captures the voice of the customer and produces the products and processes required while IPPD is the process methodology used to accomplish that goal. Continuous innovation in all aspects of the enterprise is also needed to further exploit a robust IPPD process methodology. IPPD forms the springboard for new solutions for the customer whether they pertain to new materials, formulations or combinations thereof; new processes; or new product and process technologies. There are two IPPD Critical Technology Success Factors: 1. Collaborative computer design and development driving design and development technologies to provide new insights and capabilities 2. Rapid physical realization, generating new processing technologies to allow a manufacturer to create and manufacture a new article with previously unachievable or difficult shapes or exploit new materials with new properties. Often, these two technological success factors are synergistic, allowing a manufacturer, supplier, and customer to collaborate on the design of a new product, and then literally or virtually press a button, creating a physical entity directly from this computer model. In most cases, however, there is a confluence of new computational, design or processing algorithms and processing technologies that sharply accelerate the pace of product realization. For example, the development of sophisticated ECAD software, high-speed workstations and supportive accelerators, combined with exquisitely controlled physical and chemical processes has provided the capability to design and produce the high-performance microchips which are the heart of the information technology revolution. The advent of rule-based design and optimization software such as ICAD (Concentra Corp.) provides major productivity gains to the automotive industry and similar mechanical applications. The increasing sophistication of Electronic Data Interchange (EDI) or Electronic Commerce (EC) is an important enabler to the integration of the supply chain and customers to the product realization process. The revolution in RPPR is due to the development of key support technologies, highlighted in the following Sections: Collaborative Computer Design of an Object Two groups of information technology enablers are merging, allowing a manufacturer almost limitless possibilities to collaborate on the computer-generated design of a new object. These two are: Communications technology, encompassing inter- and intra-nets, fiber optics, ultra-fast modems, highspeed communications hardware, vast arrays of sophisticated architecturally networked computers, encompassing faster machines, better modeling applications, and vastly improved product representation. Interoperability issues will have been largely resolved, although the problem of integrating expensive legacy systems will persist. High-resolution large screen displays to display complex images, etc., computer networking, complex modeling software, virtual reality technology, and a host of other capabilities. With these two technologies, a team comprised of customers, manufacturers and suppliers at various levels can be electronically co-located, even if they are widely dispersed geographically, and collaborate interactively with each other. They can design a three-dimensional object or assembly of objects that contains the physical as well as informational characteristics. It can be a simple part such as a screw, or a complex device such as an airplane or a microprocessor. One can then test this part against various known conditions, to see if it fulfills customers needs as well as manufacturers needs, without having constructed anything. This process can considerably reduce the design time. Fit of various subassemblies, ease of manufacturability, sharing of design information, control of changes to the specification, customization, etc., can all be simulated, without going to the expense of making the object, or, without spending the time to construct, ship,
and test the part at the various team member locations. Improved parts failure prediction and reliability forecasting tied to manufacturing processes will be integrated into and complement this capability. The technology to manage this type of collaborative process is well on its way. Indeed, much of this capability already exists and was used, e.g., in the construction of the Boeing 777 airliner and new automotive products. The technology will continue to evolve quickly, due to the enormous value placed on these technologies by commercial firms. Seamless interoperability of these diverse systems, however, remains a major issue for the foreseeable future. Rapid Physical Prototyping The second aspect of this revolution in rapid product and process development is the introduction of sophisticated ways to make physical objects such as rapid prototyping. These include three-dimensional stereolithography (creation of complex shapes and new materials layer by layer), MEMS (Micro Electronic Mechanical Systems) used for creation of new materials or shapes using integrated circuit technology, and a variety of shaping and forming technologies applied to conventional materials. An example of the latter is the blowing of microscopic metal beads into the path of a scanning laser to form final metal extrusions having the same molecular and crystalline properties of the base material (Sandia National Laboratories). The physics and chemistry of new materials, and new material combinations, such as practical metal-matrix formulations, new process technologies such as nanomolecular manufacturing techniques, and adaptive processes employing systolic-styled approaches to defect correction are becoming available for advanced product design and development. In integrated circuit technology, the product design information is largely contained in the masks used in the manufacturing process. Borrowing from the IC world, one can use MEMS, where the entire product definition is contained in a set of masks, to reduce the time needed to specify the product significantly. Alternatively, one can represent an object in the computer, and use CAD-CAM systems to manufacture the object with little or no human intervention. An electronic design can be transferred to a set of machines or processes, and a new object can be manufactured rapidly and accurately, from conception to completion, without paper, and with few people involved. Integration of mechanical or processing systems, however, is much more difficult than electronic integration, and the interfaces between people, machines, and computers need attention to realize seamless integration thus far not achieved. With the rapid development of the electronic design of parts and assemblies, and the new material shaping and forming processes becoming available, the trend toward rapid physical prototyping will only accelerate. It is driven by both the innovation of entrepreneurial companies and by the unpredictable confluence of multiple technologies to create new products and means for developing them. In the near term, more electronic designs, development of new materials with unusual and tailorable properties, and creation of more complex shapes are all likely. Companies will rapidly implement these technologies as they become available since they will enable a company to gain economic advantage. Significant research and development will still be required because this technology is as yet tedious, complex, and not especially accurate. The usual culture change issues will determine the timely utilization of these capabilities. Some include: the organizational structures needed to manage complex modeling technology, the capture and representation of the knowledge contained in the models, education and training of modelers, and the resolution of the cultural barriers that will result within a company, or between various suppliers, manufacturers and customers who form the team. These soft or non-technology issues will determine how fast the rapid design process will become incorporated into the company culture and thus the real competitive position the company achieves. Emerging Trends to Accelerate Product Development At least three emerging trends will accelerate the pace of product development and realization. The first is the establishment of robust object libraries where users can import a design with all the application-specific interfaces and specifications clearly defined. The users can then modify it to suit their specific application. The second is the creation of vast communication networks to share information. And the third is the use of ac-
tive and intelligent agents, to seek out specific niches of knowledge and apply them to the application under consideration. New educational tools will be needed to keep up with this rapidly changing technology. People will need to learn new skills, quickly, and on the job. They will have to improve cognitive skills to allow rapid absorption of new knowledge. Process control, as we know it, will likely change, as the ability to test or examine objects and materials becomes more robust and more complex. As a result, the systems used to manage and operate manufacturing facilities will change the computers, factory level application software, connections to machines and equipment, user interfaces and the like to accommodate these complex products. While the RPPR imperative is new and will become a critical competitive weapon, and the most effective adopters and practitioners of RPPR can gain considerable market share and financial return, the path to its most effective state is complex and lengthy. However, the most effective users will likely win. Those slower to adopt the concept will likely lose. The imperative focuses on the ability of an enterprise to excel in rapid development of new products by: Employing a broad IPPD Management System strategy Using an IPPD methodology Using state-of the art enabling and integrated information technology Training its workforce in IPPD Using the knowledge and expertise of its workforce to its maximum advantage.
1.2 IPPD Management Strategy The IPPD management strategy is the foundation upon which the cultural, process change, organizational, and management relationships are based. These relationships are constructed internally as well as in the supply chain and with customers and partners. The IPPD strategy sets the tone and style by which the multiple activities necessary to create the quality processes, capabilities, and competencies can be implemented. It supports a meaningful empowered environment. This strategy recognizes the immensely critical role of information technology in providing the key enabling tools. It recognizes the critical role that properly trained team members play in forming effective teams, achieving recognition, earning reward and reaching eventual dissolution. It focuses on the rapid identification and formation of multi-disciplinary teams that serve simultaneously to develop and optimize the design, manufacturing and supportability processes. The teams consist of all the required core and support competencies to execute IPPD, whether they be contained within the company, or are supplemented with partners or experts from the supplier chain. The strategy depends on knowing the core competencies of the internal organization and having the means to find and partner with needed external competencies rapidly. It uses a product development strategy that is rich in enabling tools to help the organization provide solutions to their customers. This strategy includes the relationship between team-based project implementations, the functional skills and capabilities necessary for preservation of corporate and company core competencies, and their ultimate effect on profitability. Ultimately, this strategy must provide for the rapid identification and deployment of team members and team leadership. Finally, critical decisions on the level of R&D investment in new product and process technology, the general distribution of R&D investment among product upgrades vs. new platforms, and objectives of product position, financial retention and market response scenarios, must be made and rationalized. 1.3 IPPD Methodology It is fundamental to the IPPD that the entire product realization effort operate in a cooperative, integrated team environment. The team must include all disciplines that could have any impact on the design at any time throughout the products manufacture, support, or life cycle, including disposition at the end of its useful life. The team also includes anyone who is affected in any way by the design in carrying out their own function, such as tooling, test equipment, product support, field service, training, environmental disposition, etc. This team exploits the strengths of the Extended Enterprise by including within the development processes the customer, the design organization, and partners(s) performing the product development, and the entire supporting supply chain.
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Different terms are used by different industries to describe the various phases of product development. No attempt is made here to be all inclusive or to provide a universal vocabulary. The important point to stress is that the interactions are rapid, highly concurrent, highly interactive, and very iterative, and that they involve the customer and the entire supplier base with their appropriate counterparts. Figure 1.3-1 portrays the intended relationship of the above entities to the IPPD Methodology and Integrated Computer Environment.
IPPD
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OMPUTER EN
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In-House IPTs
Partner IPTs
Customer
Supply Chain IPTs Customer IPTs
METHODOLOGY
Figure 1.3-1. IPPD Content and Relationships 1.4 IPPD Enabling Environment The NGM product realization environment has the following characteristics: Empowered team members collaborate in a highly concurrent, interactive manner across the entire Extended Enterprise Information is seamlessly shared and archived through an integrated, logically centralized, physically distributed database spanning all phases of the product life cycle All product descriptions are traceable to an unambiguous product definition (e.g., geometric and performance models, tolerances, specifications, design analyses, bill of materials, acceptance requirements, etc.) Process decisions, process requirements and information flow are managed and controlled by an Extended Enterprise-wide process facilitator or intelligent agent Development risk is minimized through the use of case-based reasoning, design optimizers for performance, schedule, and affordability, effective application of lessons learned, probabilistic design assessment, integrated risk management, and electronic prototypes Closely coupled or integrated computer applications that are automated for design, development iterations at all levels, optimization, and seamless data transfer Advanced tools that free product team members involvement in data generation tasks and allow increased focus on decision making and creative thought processes Support and balance of both top-down and bottom-up design methodologies Capabilities for information to be archived in stable formats and media
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Ability to conduct multiple, simultaneous, Extended Enterprise product designs via joint ventures, supplier participation, virtual corporations, or any other multi-enterprise relationship Maintenance of metrics to guide continuous improvement for all processes. 1.5 Other Considerations Evolving Definitions Over the years, many terms for this highly concurrent, interactive environment have evolved, such as Concurrent Engineering (CE), Integrated Product Development (IPD), Simultaneous Engineering (SE), Integrated Product Teams (IPT), and Design Build Teams (DBT). All have the desirable objective of assuring that all required design disciplines get an opportunity to influence the design before it goes so far that redesign is required or unplanned risks, unanticipated problems or compromises appear in the final product. Many of the earlier initiatives failed, however, because of rigid organizational structures, lack of proper training, a pervasive engineering culture of not sharing early information with other organizations, and other reasons. The primary reason for the failure of these team-based projects was lack of senior management understanding, appreciation, and support for teams. Team-based projects should be among the most critical and meaningful to a company. Their success must become a rallying point for senior managements support and enthusiasm. Finally, while senior management believes that team work and the implementation of a disciplined process will result in sharply reduced development time and cost, this belief must be accompanied by an understanding that the integrated team can cost more at the initial stages of product development, but substantially less over the project development cycle. The lack of enterprise integration and/or a computer-integrated environment to accelerate the communication of product and process design information, technical and cost status and other project information such as risk levels, risk mitigation actions and project success enablers further exacerbates the problem. Multiple Simultaneous Roles In the past, a typical concurrent engineering team would consist of a representative of each functional organization assigned to a project or program who would interface with their counterparts among customers and major subcontractors. Relationships were identified in terms of original equipment manufacturer (OEM), prime contractor, subcontractor, supplier, etc. in a somewhat serial fashion. In the NGM paradigm, most, if not all team members, simultaneously participate in multiple product developments. They may be active to different degrees depending upon the complexity of the product being developed and the role that member plays in its development. Partners on one development may be competitors in another; a customer on one program can be a subcontractor on another; a large role on one program may be a very small role in another, etc. Although this situation may be a source of potential conflict of interest, the overlying trust developed in these relationships must prevail. The entire supply chain community, whether a major subcontractor, a parts or a service supplier, is introduced into the team at the earliest appropriate time, depending upon the complexity of the product to be developed and the contribution that activity can make to the design and development phase underway at the time. These multiple relationships develop into a multitude of multi-dimensional relationships. One way to describe the complexity of these relationships is as a neural network arrangement. Virtual Co-location It has been universally found that physical co-location enhances the effectiveness of the development process. With the increasing focus on partnering and outsourcing, however, physical co-location of all participants is becoming impractical. Modern technology permits the co-location of all participants in a virtual manner and the sharing of a distributed but virtually common database. Communications such as computer networks, groupware, Internet, Intranet, teleconferencing and an increasing degree of connectivity among design tools, allows geographically dispersed team members to participate effectively in the design process. This connectivity or interoperability issue is very high on the list of barriers that impede effective RPPR today and represents a key area for continued development.
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Right First Time Objective Right the first time means different things to different people. To most organizations and their senior management, it is a metric that indicates the quality of their IPPD. Ideally, a single pass by all the responsible participants would produce the perfect design. However, until the technology, culture, and marketplace provide for such capabilities, market and business timing considerations may heavily influence how robust or perfect a design must be before it is released. Some companies release a product with known or potential limitations to be first to market, and use rapid response techniques to maintain good customer relations and product market position, e.g., test marketing. In many cases, the product, even with deficiencies, is vastly superior to what is already on the market. Others are unwilling to go to the market without an absolute guarantee of perfect quality. Such decisions are part of the risk complement of reduced cycle time development and represent strategic and operational decisions as part of the companys overall strategic vision and plan. People and Culture Issues People issues are the single greatest barrier to change. People are naturally resistant to change when they are required to take risks and accept new challenges. Changes are upsetting, at least initially, and create a sense of insecurity. The NGM Company needs to accept the challenge of developing a culture for people to embrace change as an opportunity rather than view it as a threat. The challenge is to recognize those issues that relate to employee insecurity and uncertainty. Solving them or working around them would represent major progress towards opening up the average employee to accept change positively. Rapidly shifting paradigms mean rapidly embracing change. There is recent evidence allowing us to be encouraged. Product developers are beginning to embrace change at a more rapid pace than previously (e.g., J. Welch, The Third GE Revolution, Business Week, 23 Oct. 1996). Some reasons are obvious; others are more subtle: Tremendous pressure is placed on corporations to become more profitable and productive at an accelerated rate. Downsizing has moved previously resistant personnel to become more cooperative as a means of survival. Engineers welcome technology advances that provide information at their local workstation. It has been reported that 50% or more of an average engineers time is spent looking for information. To the extent that information is more readily available, it will free the engineer to do the more creative aspects of product development and enhance his role in decision-making. The emergence of decision support tools allow the engineer to optimize his/her design rapidly, where previously, the information was either not available at all or not in a timely, accurate manner. What if analyses are becoming easier to perform as a result of interconnected tool sets. It is becoming apparent that open architecture and plug-and-play tools will be broadly available for NGM. This will allow the engineer to use his chosen analysis tools (or upgraded versions) rather than force him to use a completely different suite of tools with which he has no experience. The latter is the cause of many implementation failures and is a major reason for maintaining obsolete legacy systems. Management is encouraging an environment for team spirit by allowing greater workforce flexibility. Continuing education and training for company employees, union leaders, partners, and suppliers encourage cooperation among all stakeholders. Educators need to introduce the concepts of team learning and interaction at the core of their formal curricula. This requires a significant change in mind set and attitude on the part of both students and faculty. Educators need to set the example that collaborative problem solving is the strategy of first choice. This alone will make a significant contribution to the required culture change.
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Need For Innovation Innovation is at the core of new product and process development and is a critical success factor in the organizations cultural environment. Innovation is a big factor in new packaging and styling concepts, in smaller, higher performance robust designs, and in the processes, tools and software which provide functionality that results in more affordable, maintainable, supportable and biodegradable/recyclable products. See the Innovation Section of the NGM report for a full discussion of the subject. Innovative system and product architectures are important product accelerators. New product concepts derive from innovation in product architecture. Such architectures facilitate the use of modular components, standard parts and associated simpler, reusable test and validation methods to both the original design as well as their upgrade versions throughout the product life cycle. The Boeing 737 series of aircraft is a good representation of sound and far-reaching concepts in platform architecture. Innovation in team formation and team member selection can be key to the success of a project. Chryslers challenge in the development of the LH Cab Forward design was met in great part by the pairing of mature designers with relatively young and inexperienced but proficient computer literate, science trained personnel. This buddy system approach was an innovative solution to the lack of single individuals with the capabilities of both parties. Rapid Accommodation of New/Recycled Materials One of the many significant challenges facing the NGM Company is the ability to accommodate new and recycled materials rapidly. New materials and their application cause a wave of change requirements that ripple through the enterprise from material purchase, storage, and handling to manufacturing processes. Manufacturing processes using these materials will also face environmental issues. Even the customer needs to be educated on the benefits, required precautions and recycle-ability of the new materials. Life-Cycle View Services and Recycling The heart of the RPPR philosophy is that the entire life cycle of the product is considered at the time of its development. All the real or potentially affected parties need to be considered in the design process. This includes understanding of product services and disposal/recycling at the end of useful life. Consideration must also be given to how to educate the end customer on how to support the recycling effort. Proactive Anticipation of Customer Needs It is quite understandable that a marketing strategy that simply asks the customer what he would want in the next evolution of the product or services is vulnerable to significant failure. One of the major consequences of rapid new product introduction, frequent model introductions, niche market propagation, and the wide scale of available information, is that the consumer is becoming more and more fickle. As a customer, it is difficult to anticipate or comprehend all the product or process possibilities that technology or innovation could bring to the market place. The fact that the customer did not imagine or think of what could be, doesnt stop him/her from buying a different suppliers more desirable product or service when it becomes available, even if they specifically communicated their wishes or desires to an existing supplier. To become more proactive in determining what the customer needs, some companies have adopted an inhouse partnership with their customers and others have allowed their suppliers to be in-house partners (Boses JITII program). By being co-located inside the facilities of the customer, and by the customer establishing an open information policy with the supplier, the supplier can take the responsibility of anticipating the customer needs and help solve problems the customer doesnt know or anticipate. Although currently this partnership is largely limited to supplying non-core competency parts and materials at the point of use, it is expected that more proactive involvement of the customers and suppliers in the design and manufacturing process will become the norm for NGM enterprises. Others, such as Ford in the development of the F-150 pick-up truck, have developed the value group strategy (see Business Week, 29 July 1996).
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Increasing Software Content It is becoming obvious that products are increasingly containing a higher percent of software/firmware content. Thus the product is becoming information-rich. Whether it be additional features, self-test and diagnostics, general information on operation, maintenance or upgrade potential of the product, the evolving availability of inexpensive computing power is generating a surge in the embedded information. This information, in turn, provides more of a total solution to a customers needs. Customer demand is rising for builtin diagnostics and capability for relaying diagnostics to a repair depot. In the future, vehicles such as buses, trucks, taxis, etc. will have the capability to self diagnose problems or pending maintenance and the resulting diagnostics will be relayed, via satellite, to the closest repair depot. The system is already in use by the major airlines where personnel will have determined the required repairs, obtained the spare parts and set up the repair equipment, all in advance of the vehicles arrival. In like fashion, factory and consumer equipment will contain similar capabilities to minimize down time. Automated products with a million lines of code exist now at the high end of the product chain. Self-diagnostics via built-in software is relatively inexpensive in view of the low cost of memory chips. Closed loop testing of all functions is no longer a formidable task. Even diagnostic test and repair on the fly, described earlier, is becoming reality, as demonstrated by overthe-road transport companies. The consequence of this phenomena is that all product and process producers, from simple components and materials to factory tooling and test equipment, are expected to have an understanding of software and its capabilities. Presently many solutions providers do not have this capability and fulfill it via software specialists. The next generation employee will have received the education to be well-versed in this discipline.
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2.0 RELATIONSHIP TO NGM ATTRIBUTES Table 2.0-1 below maps the relationships between RPPR and the six attributes used to identify and describe the Next-Generation Manufacturing enterprise. For this comparison, RPPR is best described as the result of using an IPPD management strategy, a computer-integrated environment, an IPPD methodology, IPPD enabling tools, and trained cross-functional Integrated Product Teams. Table 2.0-1. Relationship Between RPPR and NGM Attributes
NGM Attributes Customer Responsiveness Management Strategy IPPD Environment IPPD Process Methodology System requirements developed jointly with customer Design for Affordability IPPD Enabling Tools Information Technology (IT) Teleconferencing Common development tools Virtual co-location Decision support tools Integrated Product Teams Customer is member of IPT Supply Chain is member of IPT as factor in features with customer
Individualized Customer collaboproducts rates in design process Proactive needs assessment Supply chain participates in design Plug & play product process upgrades Frequent model upgrades Rapidly reconfigu- Process capability rable assets & design for manufacture consid Globally distributed ered concurrently facilities
Design emphasis Rule based design on reuse, product tools consider line families, equipment & procstandardization, ess capabilities modularity, & Intelligent closedmost costloop manufacturing effective processes Extended enterprise IT tools Product Data Manager Secure links Common shared enterprise data
Manufacturing organization is part of IPT
Teaming As A Core Competency
When company is neither first or second in core competency, outsourcing is strategy of first choice Continuous learning Work-at-home programs Continuous education & training Global presence Globally distributed facilities Sensitivity to sociopolitical & ethical norms
Partners & suppliers integrated in a highly concurrent manner
Partners & suppliers are member of IPTs
Mentoring from Trust-building Corporate knowlavailable designs protocols edge capture tools Teamwork acceler- Natural language Reward & compenates knowledge standard sation tools base of workforce Internet/satellite communications Time zone advantages Life-cycle methodology Global assessment of environment, safety & health
Reconfigurable teams Resource shifting
Responsive Practices & Culture
Multi-language Multi-culture computer translators training
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3.0 BARRIERS The following barriers to RPPR have been identified, grouped by each of the six NGM attributes: Table 3.0-1. Barriers to RPPR
CUSTOMER RESPONSIVENESS 1. Lack of tools to understand customer needs 2. Need to design for (XXX) including feature costing, design for assembly, etc. 3. Lack of tools to perform product/process tradeoffs 4. Lack of product adaptability 5. Corporate and supply chain inertia PHYSICAL PLANT & EQUIPMENT RESPONSIVENESS 6. Manufacturing capabilities not adaptable to complex systems 7. Need to support old products while introducing new 8. Rapid technology change outpaces peoples ability to change 9. External capabilities & outsourcing options unknown 10. Inability to apply funding to all requirements, e.g., tooling 11. Rapid change of market requiring rapid change of people and systems 12. Lack of plant/process reuse strategy 13. Inflexible factory processes 14. Design engineers not knowledgeable of all manufacturing processes 15. Lack of focus on individual processes 16. Inadequate product support after sale 17. Poor forecast of impact of new products on manufacturing processes 18. Vested interest of suppliers in old processes & technology TEAMING AS A CORE COMPETENCY 19. Design, business and manufacturing systems are not interoperable 20. Inadequate design objectives defined 21. Lack of simulation & modeling tools 22. Lack of teaming/knowledge sharing tools 23. Lack of integrated supply chain 24. Management naivet and distance 26. Large heterogeneous & complex systems HUMAN RESOURCE RESPONSIVENESS
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28. Inflexible information technology and infrastructure 29. Cumbersome, inflexible legacy systems 30. Long term/inflexible union agreements 31. Legacy management methods & hierarchical mind set 30. Lack of education & training 32. Lack of income security 33. Lack of knowledge/systems 34. Cultural differences & work/life issues GLOBAL MARKET RESPONSIVENESS 35. Lack of sufficient global infrastructure & systems 36. International & local "cultural/political/ethical" barriers 37. Product development inadequate for specific markets 38. Unavailability of required technology and/or training 39. Inadequate information communications 40. Inadequate availability or use of facilities 41. Mismatch of business plans & objectives/management support 42. Lack of responsive supply chain RESPONSIVE PRACTICES AND CULTURE 43. Lack of systematized knowledge 44. Lack of knowledge 45. Legal, regulatory & government barriers 46. Organizational inertia
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4.0 ENABLERS 4.1 Required Enablers Section 2.0 provided a discussion of the relationship of the functional elements of RPPR, to the NGM Attributes. Section 3.0 presented the barriers that prevent the NGM Attributes from being realized. This Section discusses the enablers to RPPR which need to be researched, integrated, and applied for RPPR to come to full realization. The Enablers can be grouped into four major categories: Systematic approach using the IPPD methodology Integrated computer environment People- and culture-related effectiveness enhancers Integration of systematic approach using the IPPD methodology, integrated computer environment, and people- and culture-related effectiveness enhancers.
Table 4.1-1, below, describes what must be done to make these four elements of RPPR into enablers. Each is discussed in detail in the following Sections. Table 4.1-1. Grouping of Enablers
1. Responsive systematic process & information system tools to understand better & proactively predict customer needs & then maintain configuration control of changing customer requirements throughout the product life cycle 2. Early manufacturing participation in decisions to ensure all aspects of the product life cycle are considered in trade-offs (productivity, supportability, etc.) starting with system conceptualization 3. Concurrent development engaging all stakeholders, employing multi-disciplined IPPD teams that include customers, partners & suppliers who participate throughout the product life cycle 4. Digital simulation to minimize dependence on hardware & software prototypes 5. Intelligent closed-loop process control to ensure product quality & minimize need for final product inspection & validation 6. Design emphasis on product line families & process families to ensure reusability, reconfigurability, & scalability 1. Systematic Approach using IPPD Methodology - Include all players in product life cycle - Optimize performance, schedule, cost & risk - Provide a robust design
7. Information system tools & methodologies to perform system-level product/process tradeoffs between design features & real manufacturing feature costs 8. Electronic database(s) which contain all relevant information 9. Standards for unambiguous product/process digital data representation & seamless, public but secure, accessible open systems exchange in a distributed environment 10. New information systems to support new design processes & facilitate electronic commerce within & between the extended supplier chain
2. Integrated Computer Environment
- Common enterprise database (3D solid model) - Standards (interoperability/open systems) - Product Data Managers & groupware
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11. Databases containing capacity, capability, & core competencies
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Table 4.1-1. Grouping of Enablers (continued)

12. Team-focused education & training beginning at K-12 & continuing through college 3. People/Culture Effectiveness Enhancers - Overcoming cultural barriers 13. Change agent career path formation 14. Collaborative enabling tools to facilitate team-based product development across the Extended Enterprise 15. Enhanced team-oriented management policies, compensation systems & organization structures - Team-focused education & training - Overcoming resistance to change - Empowered teams & organizations - Maintain/enhance functional competence & flexibility
16. Design-to-cost models to enable proper design tradeoffs & makeversus-buy decisions 17. Risk analysis to produce a competitive product ensuring process robustness & quality 18. Enhanced design process to reduce risk & uncertainty in product/process technology validation 19. Modular, flexible, & robust design approach & information system tools to ensure the use of fewer but more standardized parts/ modules, emphasizing re-use of existing designs & processes
4. Integration of Development, Approach, Environment, & People - Modeling & Simulation - Validation (prototyping) - Process Control
4.2 Systematic Approach Using Integrated Product & Process Development 4.2.1 Purpose It is becoming increasingly evident that a systematic approach is needed to implement RPPR successfully. This systematic approach includes six elements: 1. A comprehensive state-of-the art technology assessment of commercial or defense industries, their relevant end products, subsystems and components and the associated product quality, cost, availability, and capability of manufacturing processes, development and business best practices as a baseline 2. Formation of multi-disciplined, cross functional team and organizational support implementation approaches 3. Collaborative assessment and validations of real customer needs and requirements 4. A structured methodology to establish entrance and exit criteria, as well as performance metrics, for the process being performed 5. Design collaboration for product life-cycle affordability as well as performance, from concept through product disposal 6. Use of enterprise connectivity to model and simulate customer options and design alternatives minimizing the need for physical prototypes. The purpose of RPPR is to design a new product or product line extension rapidly and to achieve a robust design of both product and process that is both affordable and performs beyond customer expectations. The typical RPPR objective is to achieve a minimum of 50% reduction in product life-cycle cost, time-to-market and development cost. Key enablers that comprise this systematic approach are:
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Responsive systematic process and information system tools to better understand and predict customer needs proactively, and then maintain configuration management control of these changing customer requirements throughout the product life cycle Design emphasis on product line families and process families to ensure reusability, reconfigurability, and scalability to achieve a robust design Concurrent development that engages all stakeholders and employs multi-disciplined integrated product and process development teams which include those of customers, partners and suppliers, and who participate throughout the entire product life cycle Early participation by manufacturing (starting at the system concept phase) in design tradeoff decisions, to ensure all aspects of the product life cycle are considered (including cost, producibility, supportability, etc.) Intelligent closed-loop process control to ensure product quality and avoid or minimize the need for final product inspection Extensive use of simulation and virtual prototyping to minimize dependence on physical hardware prototypes. 4.2.2 Traditional State of Application In the early eighties, IBM developed their Pro-Printer using IPPD methodology and IPTs. Similarly, in the mid-eighties, the General Electric Co. Locomotive Division developed its new locomotive and, as a result, earned the Society of Manufacturing Engineers LEAD award. In defense, the F-22 Fighter and MODAR allweather avionics system are considered to be good examples of the use of best practices. Most team-based applications, however, appear in commercial industries. The big three auto companies have tried to recover from the significant loss of market share to the Japanese companies in the late eighties and early nineties. The Chrysler LH Platform, the new Ford Taurus, and the GM Cadillac are examples of earlier RPPR best practices. Hewlett-Packard is one company that is empowering each of its businesses to own their own strategies and to employ an RPPR strategy of Integrated Product/Process Development using IPTs. In the mid- to late- eighties, other examples of rapid product realization best practices emerged which focused on robust design of entire product lines and which employed enterprise integration, IPPD, and IPTs. These include John Deere tractors and Caterpillar construction equipment, Allen Bradleys machine controllers, and Ingersol Milling Machine Companys milling machines. No one company, however, has comprehensively defined or developed all of the key elements or enablers that should be considered to achieve successful and continuous shorter time-to-market cycle time and balance performance and product life-cycle cost tradeoffs optimally. 4.2.3 Current State of Application There have been numerous applications of some elements of RPPR. Only Japanese companies have really started to involve all of the downstream disciplines early in the design concept phase. Even the much heralded Boeing 777 Airplane and new Chrysler LH Platform, did not fully implement the downstream requirements. It is estimated by the Chrysler LH Platform manager that about 60% of IPPD Best Practices were used to achieve the dramatic results. Other products like the Westinghouse Electric Corporations MODAR all-weather avionics system involved a multi-disciplined team, starting at the design concept phase, but did not adequately train the participants, and did not utilize a total systems approach. Nevertheless, and in spite of these inadequacies, companies are reporting significant reductions in product life-cycle cost and time-to-market. The particular focus to date has been on the up-front design process: bringing together the customer, a multi-disciplined team, and key suppliers in designing the components and processes. Enterprise connectivity has been accomplished mostly by the OEMs dictating the use of the software package, particularly for the product design, e.g., Boeing 777 and Chrysler used CATIA. In semiconductor manufacturing, total enterprise connectivity has been achieved for the product and process design, but the Manufacturing Execution Systems (MES) are not yet adequately integrated. Rapidly developing agent or object programming appears as if it will facilitate the integration of heterogeneous databases and systems platforms in
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the near future. This will permit one to model fully and simulate alternate design approaches at a system level, not just at the singular component level. 4.2.4 Emerging State-of-the-Art Extensions The most significant RPPR extensions were those defined in the National Center for Advanced Technology (NCAT) white paper on Applying IPPD in Advanced Development. Published in January 1994 as Technology For Affordability - A Report on the Activities of the Working Groups, this report was prepared for Dr. Anita Jones, Director of Defense Research and Engineering (DDRE), Department of Defense (DoD), which subsequently served as the cornerstone for Dr. William J. Perrys 10 May 1995 Directive on the Use of IPPD and IPTs in DoD Acquisition. The key IPPD tenets described in the Perry Directive match very closely what is described in this volume: 1. Customer focus 2. Concurrent development of products and processes 3. Early and continuous life-cycle planning 4. Maximum flexibility to optimize and use contractor-unique approaches 5. Robust design and improved process capability 6. Event-driven scheduling 7. Multi-disciplinary teamwork 8. Empowerment 9. Seamless integration of management tools, and 10. Proactive identification and management of risk. In the commercial world, an increasing number of companies are realizing that they need to focus on a more systematic approach that starts at the concept design phase, where 70 to 85% of the product life-cycle cost is determined. The auto companies and Boeing found out that even though they used a digital product design model in the detailed design phase, system concepts that were selected early on locked them out of more optimal design alternatives. It is particularly important that manufacturing process and tooling experts need to be consulted earlier. Similarly, reliability, maintainability, and supportability experts also are needed at an earlier point in the process. 4.2.5 Pilots of Emerging State-of-the-Art Extensions Although commercial companies are modifying their RPPR approach to incorporate most of the elements or enablers defined in this volume, they do not conduct public pilots, per se, for numerous cost, competitive, and strategic reasons. The closest applications are the Partnership for New Generation Vehicle (PNGV) and the National Electronic Manufacturing Initiative (NEMI). The latter resulted in the design of a $300 product emulator, to be used in exploiting the National Information Infrastructure (NII), by seamlessly integrating all means of communication from the telephone, fax, cable TV, TV, movies, PCs, etc., for the purpose of accomplishing seamless multi-media interoperability for both consumer and commercial applications. These two R&D pilots are sponsored by key auto industry and electronics industry companies jointly with Government agencies which are supplying matching Science and Technology funds. Both of these programs are under the auspices of the National Science & Technology Council (NSTC) Coordinating Committee on Industrial Technology (CCIT), chaired by Dr. Mary Good, Undersecretary of Technology for the Department of Commerce. The DoD has two major R&D programs addressing affordability: 1. Affordable Multi-Missile Manufacturing (AM 3) managed by the Defense Advanced Research Projects Agency (DARPA) 2. Joint Affordable Strike Technology (JAST), recently changed to Joint Strike Fighter (JSF), managed by the JSF Program Office. The overall objectives are the reduction of time-to-market and product life-cycle cost by 50%. In the early design concept phase of both these programs, heavy emphasis is placed on designing for affordability and
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performance, not performance alone. The use of IPPD and IPTs, and the use of a more systematic approach, incorporating most of the ten tenets described in the Perry Directive on IPPD are objectives of both programs. Individual feasibility studies have been completed recently on key elements. These will be followed by selected pilot prototype development over the next 2 years, followed by actual RPPR of the end product in years 3 through 5.
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4.2.6 Future Stretch Goals The most significant enablers that need to be improved if RPPR is to be fully realized are: Recognition of the need for effective team formation and reassignment IPPD tools and methodology training Revised system and structure for more effective individual, team, and organization recognition Total systems approach for optimum results, starting at the design concept phase where customer needs and requirements parameters are evaluated and traded off Seamless interoperability of all CAE/CAD/CAM/CAT/CAI information system tools to model, simulate, and make optimum system and subsystem level tradeoff decisions that affect performance, producibility, and the other down-stream ilities in the shortest possible time Consultation and use of all stakeholders, including customers and suppliers, regardless of where they are in the food chain or product life cycle throughout all phases of product development. 4.3 Enterprise-Wide Integrated Computer Environment 4.3.1 Purpose Certain of the key enablers, shown in Table 4.1-1, that are affected by the Integration of Enterprise Information include: Information system tools and methodologies to perform system level product/process tradeoffs between design features and real manufacturing feature costs Electronic database(s) which contain all relevant information Standards for unambiguous product/process digital data representation and seamless but secure, accessible, open systems exchange in a distributed environment New information systems to support the new design processes and facilitate electronic commerce within and between the extended supplier chain Databases containing capacity, capability and core competencies. Past Practices and Problems Several barriers impede a company from obtaining and using the extensive body of supposedly available information: Lack of knowledge that the information exists Lack of knowledge on how to access it Lack of availability of multiple, user-friendly formats for the data Non-existence of the means to transfer the data seamlessly Security of the data Inability to capture and record corporate knowledge.
The classic approach to the design of products and processes rarely used information technologies for documenting decisions for concepts, design approaches, trade-off analyses and other design and development data and information. Instead, handwritten notebooks, company logs, and other similar techniques were eventually turned into technical files. Since engineers (especially software engineers) resist documenting their thought processes and design approach, their notebooks were of very limited use to other design and development personnel. In many cases, the designer relied on memory to recall the basis or rationale for decisions. When a design modification was required, calculations were re-done with the new parameters and the impact on the required function was passed on to the affected parties via data items or memos. Reusability of existing designs was also a problem. Design efforts were redundant. Legacy designs lacked the supporting requirements, regimes of application, and interface information required to assure its proper use. Group Technology, a concept known for decades, simply was not used.
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New Approaches A rapidly growing body of software products is evolving that will address many of these problems. A number of companies have initiated a major effort to simplify the collaborative process for their designers by developing or purchasing software tools that permit the accelerated search for information and passing of design data to those who need it. They have integrated these software tools to permit more rapid and comprehensive product and process design and review and approval of the design. Many products also include provision for cataloging and storage for subsequent retrieval and use. Examples include: Electronic notebooks allowing the engineer rapidly to look up textbook information and solve mathematical equations on-line Point and click vendor parts in a CAD design that places the part in the desired location, to scale Use of spread sheets that contain embedded algorithms. By inputting performance requirements into the correct cells and executing the spreadsheet algorithms, a mathematical representation of the final product is produced which can be downloaded for machining or fed to stereo lithography equipment System-level object-oriented software that allows hierarchical specification generation in a collaborative environment Tying hierarchical Work Breakdown Structure elements to Project Schedule software Linking cost models for design to cost analysis and trade-offs Linked analyses files to allow rapid iteration of the design and perform what-if analysis Introduction of groupware to facilitate the collaborative process Use of standards generated from organizations such as PDES, STEP, ISO, etc. These tools are applicable to product and process concept development and requirements definition as well as detailed electrical design and pre-assembly tools such as CATIA; productivity rule-based tools such as Consentra; requirements maintenance and traceability tools such as Ascent Logic, SLATE (TD Technologies) and RDD-100; electronic and mechanical design frameworks such as Mentor Graphics Falcon Framework and Intergraphs Solid Edge. In addition, key integration tools including work flow and enterprise file management tools include Product Data Manager products by Sherpa, IBM, SDRC/Metaphase, Computervision and Hewlett-Packard, among others. One of the commercially available enablers that supports information storage, retrieval and flow throughout the organization is the Product Data Manager (PDM). A Product Data Manager is a software package that is intended to provide a structured mechanism for searching, generating and controlling the flow of engineering product information throughout the enterprise. It consists of, but is not limited to, the following capabilities: A cataloged vault for hardware and software drawings and documents (in multimedia form, if desired) A data manager for data from multiple sources such as, existing technical files libraries, data and drawings generated on workstations, NC code, CASE tools, word processing, electrical CAD, mechanical CAD etc. Once captured by the PDM, the information is available for viewing by all interested parties and can be catalogued and added to the vault for future use, even work in process can be captured Process Management, identifying and controlling the flow of information from creation through review, approval and release Change Management, permitting the generation of change notices on line and forwarding them for review and approval. Local PC viewing and document markup is included Configuration Management controlling the revision levels of all drawings in the vault throughout the product cycle i.e., with the capability for multiple revisions, including such categories as-designed, as planned, as built, and as-maintained configurations Support of the product supply chain world-wide, i.e., multi-site enterprises, customers, partners, and key suppliers Serve as a single source of product data across all functions.
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A PDM does not serve as a substitute for a CAD system, an electronic document preparation system, a workgroup manager, an inventory manager or a project manager. However, some companies have linked many of these capabilities into their PDM and are working with their PDM suppliers to integrate their legacy tools. Highly dependent on the information technology architecture, number of users, and the extent of the process reengineering and standardization of the various design and development processes, these tools can be an important strategic facilitator to accelerate the product development cycle. All require some degree of revision of existing processes to maximize their capability. It is necessary to be sensitive to subtle critical issues associated with the process change that are always present. 4.3.2 Current State of Application The early payoff of a properly implemented PDM is the ability to scan and catalog all information in the Technical Files Library. Once scanned and catalogued, any authorized person can search, view and act on any document from their his/her PC or Workstation. This capability drastically reduces the non-value added time of a designer. Time spent looking up drawings, and processing of the information contained therein, can consume over 50% of a designers time. The ability to find designs that have been completed and proven, can save a significant amount of non value-added effort. Further, the use of markup software usually integrated with these systems can generate a derivative design or change by issuing a change notice. By marking up a drawing or document on the PC, and using the work flow feature, the author can pass it onward for review and approval. Notification of required action is another feature of this capability. The rapid electronic generation and approval of an Engineering Change means that the cut-in point can be earlier, resulting in avoiding or minimizing retrofit or rework of in-process material or even the need for scrapping already completed but now obsolete parts. The promise of the capabilities of Product Data Managers (PDM) has many companies determining what capabilities are needed, what PDM to purchase, and how quickly it can be implemented. Unfortunately, the current state-of-the-art is that a PDM from one supplier does not interoperate with a PDM from another supplier, and implementation can be time-consuming and expensive. This causes problems in an Extended Enterprise, collaborative environment. In the case of acquisitions by large companies there is a high probability that another suppliers PDM is already in use. Further, not all design applications contain seamless interfaces with the selected PDM, such as translators or encapsulation techniques. Additional work is warranted in this area. 4.3.3 State of the Art/Best Practices Despite existing interoperability issues, many companies are making significant strides in RPPR type initiatives. In visiting leading edge companies and conducting literature searches, the current state-of-the-art Best Practice results in the following parametric improvements in RPPR activities: Cost Reduction Development costs - 25 to 35% Manufacturing costs - 40% Number of changes - 50% to 90% Scrap and rework - 75%- to 95% Paper distribution - 80% Time Reduction Time to design new product - 40% to 60% Eliminates much of the non-value added time in locating and retrieving data. 4.3.4 Emerging State-of-the-Art Extensions Many companies have extended some of the above capabilities to partner and supplier organizations. The lack of interoperability among PDMs from different suppliers requires all partners to have the same brand PDM. Although the purchase of a commercial PDM accelerates the integration of information within a company, some organizations have moved towards generating software to integrate their information sources, and, in the process, implemented some features of PDMs described above.
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Another emerging state of art extension is the linking of analysis tools to cost and schedule tools. This allows for rapid what-if analysis to support the decision-making process. Finally, the most logical extension of interconnectivity is taking place, i.e., linking engineering with production planning and control activities of the enterprise. One of the outputs that a PDM manages is the bill of material (BOM). The BOM is the key input to MRP II and other ERP systems. It is, therefore, obvious that a linking of these capabilities extends the enterprise integration capabilities of a company. Some PDM companies claim to link into the R/3 client server application suite. Linking these two packages, and implementing them effectively, marries all the information of the enterprise, namely, the financial, accounting, human resources, manufacturing, logistics, sales, and distribution databases. 4.3.5 Pilots of Emerging State-of-the-Art Extensions Technology Enabling Agile Manufacturing (TEAM) This joint Department of Energy (DOE) and industry project, with over 40 participating organizations, started in July 1994 and has the following objectives: Develop, integrate, demonstrate, validate and deploy agile manufacturing technologies to enhance the global economic competitiveness of U.S. industry and the capabilities and cost-effectiveness of participating organizations Leverage and synergize the talents, tools, and resources of private industry, DOE, and other federal agencies, and interested academic institutions and consortia to accomplish the specific technical and strategic goals set forth by industry Contribute to the emerging, greater national agenda for agile, lean, and flexible manufacturing by aggressively driving technologies from the laboratory to the shop floor to support this agenda. The TEAM Project has five thrust areas: Product Design and Enterprise Concurrency Virtual Manufacturing Manufacturing Planning and Control Intelligent Closed Loop Manufacturing Enterprise Integration.
Rapid Application-Specific Signal Processors (RASSP) This Lockheed Martin contract, received from DARPA, is geared to accelerating development of ApplicationSpecific Signal Processors by a factor of four. Three technology thrusts provide key enablers for reuse, quality, and time-to-market: Model-year architecture provides framework for reuse, by promoting hardware/software upgradability and reusability through use of functional standard interfaces and modular software architecture Rapid Prototyping Methodology enables efficiency and first-pass success by using performance modeling and virtual prototyping Integrated enterprise-wide environment enables virtual corporation concepts in three ways: 1. Using collaborative systems tools for requirements analysis, functional analyses and system partitioning 2. Emphasizing design reuse of validated elements from component libraries 3. Supporting transition of design to manufacturing by providing electronic link for concurrent collaboration with manufacturing and direct transfer of designs to manufacturing sites. National Electronics Industry Sector Pilot Program (NEISP) This project at Arizona State University was funded by DARPA under the project management care of the USAF Manufacturing Technology Directorate. The objective is to measure the worth of agility when using electronic commerce throughout the supply chain and the degree of business process integration as it relates
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to time compression, cost reduction and quality improvement. The project is modeling the as is condition in four industry supply chains and evaluating and measuring the to be metrics: Motorola and its supply chain for precision prototype parts Hughes and its supply chain for design concepts Sandia and its supply chain for acquisition of parts Tobyhanna Army Depot and its supply chain for acquisition of printed circuit boards.
Electronics Agile Manufacturing Research Institute (EAMRI) The objective of this activity at Rensselaer Polytechnic Institute (RPI) is to develop an understanding of the agile manufacturing enterprise through the creation and quantitative study of distributed manufacturing operations in advanced electronics. The results of this research are to be disseminated in a form which will influence the practice of agile manufacturing by industry. In addition to RPI, key partners in this project include AT&T, Digital Equipment Corporation, Georgia Institute of Technology, and NIST. The EAMRI project consists of two phases: An electronic product designed at one site will be simultaneously manufactured at three different sites Three different products will be designed at separate sites and manufactured at a common site. Five tasks are involved: Team Building Quantitative analysis (evaluation/assessment of prototype demonstration) Functional prototyping/proof of concept testbeds Education, training and dissemination Documentation. Product Realization Environment (PRE) PRE, alias XCELL, is a software development toolbox developed by Sandia Livermore Laboratories for building custom distributed parametric design environments. It is an open architecture, object-oriented design that provides guided access to a wide range of tools, databases and commercial and in-house software. It is a computer desktop environment for design and process development that places a high value on reuse and integration of commercial software. The PRE environment is intended to act as an assistant, invisibly helping the design engineer by removing some of the boundaries between separate computer tools, integrating data from early design phases into later stages of the process and folding data about production capability and capacity into the earliest stages of product concept development. Further, it provides a framework in which collaborative tools can share cross-platform data. It is designed to be a highly distributed system, with portions of the software running concurrently on many diverse computers. Examples of commercial integrated software includes JAVA and CU-SeeMe. The latter is a software package that, in the Sandia application, allows teleconferencing on a PC with up to eight people viewed simultaneously. CU-SeeMe supports up to 100 active participants simultaneously. 4.3.6 Future Stretch Goals The end objective of this enabler is to have all the affected activities and associated tools involved in product development be electronically connected throughout the design/development/production/product support process. It will provide for: Real-time multimedia communication for all participants, physically co-located or geographically dispersed (virtual co-location) Connected, transparently common tools for rapid and simultaneous design and development of the end item, its manufacturing tools and support functions (training, operating and repair instructions, etc.) Real-time assessment of impact on the design for an incrementally proposed or implemented change e.g., change one part and immediately see the effect on performance, weight, cost, availability, reliability, maintainability, etc.
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Interactive information between PDM-like systems and MRP/ERP systems where cost, availability and lead time information will be instantly available to the IPTs as parts and materials selection is taking place. Standardization of interfaces and protocols will have a major impact in making interoperability feasible. Seamless plug and play interoperability among different design platforms, operating software and PDMs are required goals for the future. No matter how thorough a corporation is in selecting a PDM or other hardware and software for all its divisions, mergers and acquisitions usually result in varying PDMs being used. Also, the need to connect the customer and supplier base requires interoperability among disparate systems. Whether it be open architecture, standards for interface, or robust translators, these capabilities need to be integrated fault-free and easily. Similarly, connecting legacy hardware and software platforms for sharing information generated with different equipment needs to be given a high priority. This would accelerate the linking of design analysis tools for real time design iteration, design optimization and trade-off analysis. 4.4 People/Culture-Related Issues 4.4.1 Purpose Historically, the primary role of people in the organization has been as a resource for a specific function, process or technology. An engineer or technician usually holds the key to a specific technology or process which makes him/her the resident expert. These experts are usually called upon only when their specific knowledge and skills are needed and their scope of knowledge and skills is generally relatively narrow. Participating in more than one project is a potential source of conflict. Management has to decide on priorities and one or both of the projects might suffer due to the missing or part-time resident expert. The enterprise in which this engineer works is typically hierarchical in nature. Stovepipe or silo organizations are the norm. Rarely does an employee cross from one stovepipe to another. The engineers network is usually internal to the company and further restricted to the stovepipe organizations in which he/she has been placed. An engineer working on a design may never meet or talk to the customer (external or internal, such as manufacturing) or suppliers involved in a product or project on which he/she is working. Because of an engineers level of expertise, often, not even his/her direct supervisor questions what he or she does or how it is done. In the NGM Enterprise, the traditional matrix organization of functional experts will be required to migrate into teams of generalists with a broad base of functional expertise. The teams will have a broad knowledge and skill base with a minimum of resident experts in any particular field. The decision-making process and empowerment shifts from the individual to the team. The individuals expertise helps the team make the right decision at the right time. The teams will be globally dispersed and required to make decisions at the lowest possible levels to be as effective and efficient as possible. Some of the key changes, regarding the role of individuals, that are necessary to migrate into an NGM Enterprise include changes in: Management attitudes regarding teams and the employees participation on teams Individual self-image: the way they think of themselves and their role on the team and within the enterprise Location which will move away from other team members and involve working remotely from home or another location. This will ultimately lead to changes in the team members behavior and social patterns Going global which will necessitate knowledge of and changes in cultural acceptance The global enterprise with widely dispersed team members which will result in significant changes to the team members physical environment as well as force a totally new set of ergonomic issues, i.e., time zone changes around the globe The traditional hierarchical management structure which will need to migrate into a matrix, team-based organization The systems that support the organization (managerial, technical, financial, etc.) which will need to evolve into highly integratable, agile, robust systems that support the global, team-based organization Development criteria for team participant and team leader selection, team-based reward and compensation systems, and how to reassign individuals successfully after a project is completed
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Development of agile Integrated Product Teams, i.e., to what extent can team members be changed without incurring project delays (time) and unplanned costs, while maintaining integrity of the team (robustness)? What percentage of the team members can be rotated out simultaneously (scope)? It cannot be overemphasized that the cultural changes required to achieve the changes described above are very significant. Unless people are trained and educated to adopt change as an acquired skill, people and culture related enablers will probably be the single most significant impeding element for NGM. 4.4.2 Current State of Application The changes needed to achieve the NGM Enterprise in most organizations, stem from the current state of affairs. The step from the traditional, matrix-based organization into the NGM Enterprise can appear to be formidable; but examples exist which demonstrate that the transition can be made. The current state of the IPPD/IPT environment, relative to people and culture, can be characterized in the following way for most but not all organizations: The formation of IPPD and product focused teams is generally viewed by employees as down-sizing as opposed to right-sizing. Employment or status is in jeopardy, lifestyles are at risk, co-workers and peers are moved or let go, and a general sense of instability pervades. In much of industry, organizations continue to be functionally matrixed and hierarchical in structure. A legacy of functional and team interaction expertise exists on some teams from previous teams or process action team assignments. Unless teams have the expertise for improving product development cycle time, a design is not optimized for cost and performance. It will ultimately result in organization and management frustration and disappointment with team-based systems. The majority of support systems (costing, financial, technical, management) and their structures, have not been modified so that they can be integrated with product development tools to provide the right information in the right format to the right people at the right time. The current support systems still support hierarchical structures and do not address the team structure (i.e., delegation of authority). There continue to be individuals and management in the organization that cannot or will not change or adjust to the new team structure. The cultural posture of most organizations is, and will continue to be dominated by the institutions tradition and the degree of understanding, style, forcefulness and candor of the organizations leadership, led and enforced by the senior executives such as the CEO, President and their staff. Whether an organization is hierarchical in structure, team-based, or a hybrid, the most important components are the skills and capabilities of all members, particularly at the decision-making level. The overcoming of cultural barriers, resistance to change, team empowerment, team education and training, the balance between team-based knowledge and assets and the sustaining of core competencies ultimately rests with senior management. Their understanding of the NGM paradigm and the needs of their respective organizations, in their respective industries, is the most critical element in transforming the current state of organization skills, education and training systems, reward and compensation policies, and enterprise support systems of all forms to the NGM state. Their training and education and the indepth understanding of the importance of Best Practices are fundamental requirements for executing the shift to the NGM paradigm in an orderly and successful manner. It is critically important to understand that successful organizations will require a balance of core competency experts, team player skills and well informed strong company management and leadership.
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4.4.3 State of the Art/Best Practices The most effective criteria for successfully institutionalizing people and cultural best practices can best be judged by the sustained strong financial success of the organization. This is true regardless of whether such financial success is the traditional balance sheet reporting of commercial publicly held companies, budget management for governmental entities, or program services delivered in the case of not-for-profit organizations. The balance of domain experts, team-based generalists and management varies significantly by industry, size of company and current market position. Therefore what is comprehensive and universally proven today must be re-evaluated and tailored for each NGM Company. However, certain overall Best Practices sources exist and can be accessed to provide insight as to what represents current state-of-the-art. The most useful sources for RPPR practices are those companies at the forefront of effective, successful process and IPT team implementation and have been described earlier in this section. For these companies, best practices include: Characterizing their organizations as to their understanding of competitive capability, the elements of change affecting them, and readiness to embrace change Strategically assessing required core competencies across all domains and disciplines, from program/platform management, to domain expertise, to management Assessing the skill capabilities and capacities in the organization Assessing the most critical actions to be taken to apply these resources to programs key to the organizations future, using the guiding principles evolved to date: 1. Careful and insightful selection of team members and leadership (experts and generalists) 2. Team training (a la Special Operations Forces of the U.S. Military) 3. Team empowerment and support 4. Broad and consistent communications by management 5. Aggressive assessment of the appropriate compensation and management system, investigating specific companies and functions that have been successful. 4.4.4 Emerging State-of-the-Art Extensions Companies are experimenting with different methods to address the comfort level of employees. Lack of experience in supporting the global, team-based environment makes it difficult. Four areas stand out as emerging extensions. They are: education and training, people empowerment, cultural barriers, and functional excellence. Organizations must accept, promote and provide training of 40+ hours/year as compared to the traditional 10-20 hours/year. Education and training will need to provide training that will broaden the skills base of the engineering talent. In addition, there must also be continual training to strengthen the teams skills. The training must be made available on demand, i.e., any time, any place, to assure responsiveness of the organization. Emulation of the U.S. Military Services team training approach set of Special Operations Forces is a good source of training experience. There is a great need for a standard set of compensation tools to meet the needs of the team as well as the individual. The primary goal should be to empower the employee with a standard in which to measure and reward while optimizing employee satisfaction and motivation. One of the most difficult aspects of implementing a compensation system is wide-spread skepticism on the part of leadership. By demonstrating the positive effects of team/individual-based compensation, leadership will be able to develop a faith that the system has merit and allow it to grow and evolve as the enterprise does. Cultural issues will only continue to grow as the NGM Enterprise becomes more dynamic and global. Training is key, but acceptance of diverse cultures is critical. Old prejudices must be recognized. Means must be provided to help people overcome these and become more tolerant. The NGM Enterprise will have to provide a personal needs set to address diverse cultures and social patterns to satisfy personal needs.
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Another area to be addressed is the need to support and enhance functional excellence. The development of expert systems for decision support and problem solving is critical in allowing the team and its members to obtain the information and tools needed to make the right decisions at the right time. The expert systems will require a learning component that will assist in the migration to artificial intelligence. Functional excellence can only be achieved if the enterprises infrastructure is capable of fully supporting the global, team-based environment. At a very basic level is the need for support systems and infrastructure redesign. IPPD/IPT work redesign and toolset development will take place at a higher level in the enterprise. 4.4.5 Pilots of Emerging State-of-the-Art Extensions The pilots of today reside in the various implementations of IPPD and IPT discussed previously. Some examples of pilots for companies who are excelling in people best practices follows: General Electric: Leadership Education at Crotonville tailors programs to develop talent at all levels of the organization Bristol Myers Squibb: uses effective leadership strategies to sustain organization performance during times of transformation and change Allied Signal: Re-engineering and realignment and assessment with competency profiles for job positions Saturn: teaming/union partnership, training +100 hours Miller Brewing Company, Trenton, Ohio: self-directed work teams Hewlett-Packard: high-performance work systems Walt Disney: employee appreciation. 4.4.6 Future Stretch Goals There are still areas relative to the people enabler that need to be improved upon. Not every organization has embraced all those state-of- the-art best practices previously described. A few select organizations are putting them to work and extending themselves to the next level. Emerging examples of these next steps include the identification and application of core competencies and the concept of learning organizations. Companies and organizations are attempting to define what their core competencies are and how to use them to leverage their business. Core competencies can be described as those skills and technologies that a company excels at and can result in a unique added value benefit to their customers. Core competencies can be a process, a provided service, a technology, a particular discipline and/or a specific product. Whatever it is, it is something the organization is very good at and other organizations would benefit by acquiring that expertise, skill or technology. In many cases, a company might choose not to compete in a market where core competencies were not available in-house or through teaming arrangements. Hamel talks about core competencies in his book Competing For the Future,...when we focus resources on competencies, we create stability. If we can leverage those competencies, we create growth. An example of a company leveraging core competencies is DuPont. DuPont is using their core competencies or dimensions as a framework to define what they need in their employees and what is needed to transform or acquire those skills in employees. Learning Organizations are based upon more than training employees. They are based upon establishing an environment where people are very flexible and are able to learn together to accomplish their jobs in a better way. The premise of learning organizations is that the only way to beat the competition today and in the future is to be capable of learning faster than that competition. Shell Oil Co. and Ford Motor Company are examples of pilot learning organizations. Characteristics of incentives and the dynamics of change relative to an organizations needs for skills are fundamental to defining, understanding, and implementing best practices in an NGM enterprise. Specific pilots of real commercial IPPD/IPT implementations should include specifically designed assessments of the team composition, reward/compensation, and other behavioral science elements to gain specific insight into the most critical elements affecting an NGM enterprise.
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4.5 Integration of Systematic IPPD Methodology, Computer Environment, and People- and CultureRelated Enablers 4.5.1 Purpose Three enablers of RPPR are critical from the perspective of management: A systematic approach using the IPPD methodology An Integrated Computer Environment providing rapid communication The integration of the human resources into the manufacturing enterprise in the most effective way. Integration is the key to making the manufacturing enterprise work successfully. The manufacturing enterprise as we have described it, however, is no longer a simple straight-forward factory organization. The management of such a complex and dynamic enterprise will require knowledge beyond the usual combination of facilities, materials, people, and technology. Good management will require the ability to apply resources to parts of the enterprise selectively at different times and in varying degrees. This degree of integration is not yet available for creating the kind of manufacturing enterprise envisioned by NGM. Therefore in this section, we can only describe case studies of current activities. From these, along with considerable forward thinking, will emerge the best practices for an NGM enterprise. Companies will have to assess their own situations and make judgments accordingly, for there is no prescription that will fit all, or even most, scenarios. The fundamental ingredient that will have to be developed for all enterprises is being proficient in changing and reconfiguring resources rapidly to address the changing economic and business environment. At this time, Management Process Engineering (above the factory floor) is perceived to be a substantially less robust discipline than Manufacturing Process Engineering (on the factory floor). Management Engineering uses information sciences and couples them to human behavior. This coupling is subtle and involves the factors discussed in Section 4.4. Management science has not produced a supporting Management Technology and the science remains a soft discipline not supported by a good quantitative methodology. Today, companies rely on the judgment and experience of their management. There remains a clear need to create the theory, tools, frameworks, visualization techniques, simulations, training material, and deployment mechanisms to bring Management Process Engineering to the level of Manufacturing Process Engineering. As a starter, this integration process should lead to integration of the pilots described in Sections 4.2 through 4.4 leading to a more quantitative database from which to evolve a more scientifically constructed research program for this key enabler. Integrating the approach, development environment, and people enablers, one must consider the following areas: Modeling and Simulation Validation Process Control Variability Management.
4.5.2 Traditional State of Application Traditionally in modeling and simulation, and certainly prior to 3D modeling software, it was significantly more difficult to imagine what final products would look like and feel like. To show the customer what the final object would look like, cardboard, wood and other materials were used to build elaborate facsimiles or mockups of the final product. These mockups were used to visualize part placement and to perform simulated assembly/disassembly operations as well. Where extensive man-machine interface was required, however, such mock-ups were poor representations. Invariably, problems are related to access to fasteners and to the ability to apply tools to disassemble the product. These problems often were discovered much later in the design process. For those people not able to visualize objects by reading engineering drawings, the emergence of 3D solid model tools has been a major asset. Even those who were well versed in interpreting drawings found it significantly easier to accelerate product development and minimize errors with these tools.
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4.5.3 Current State of Application Direct translation of CAD data into a software shell allows single members or groups of people to navigate in a 3D environment: on the surface, in the material, or outside the object(s) under investigation. CAD data is downloaded to emerging facilities like helmets with built-in viewers or Cave Automatic Virtual Environment (CAVE) where analysis can be conducted. The technology allows dynamic kinematic representations of the product being designed and interactive capabilities are included, where desired. These CAVE sites are rapidly reconfigurable and interface with many different CAD tools that support IGES surface entities. The current state of application of this technology includes but is not limited to: Anthropomorphic models for man-machine interface designs Layouts of vehicle instrument and control panels Design of the next generation submarine Layout of factory and factory equipment Integration with medical diagnostics using CAT scan or magnetic resonance imaging (MRI) data Tool path collision analysis Physics-based and behavioral-based product models CAD conferencing Video teleconferencing.
These capabilities allow design iteration in hours rather than weeks or months. Success of tools such as CATIA for digital design and pre-assembly have been demonstrated by Boeing and others. Realistic mechanical surfaces and contours are being provided by innovative design software providers. Rule-based design systems have enhanced automotive and mechanical design productivity by orders of magnitude. Physical modeling of the environment such as simulation of sea dynamics for surface or submarine vessels, determining the effects of external forces on the frame of a vehicle, and simulation of effects of depth charges in the vicinity of submarines are all examples of additional capabilities. 4.5.4 Emerging State-of-the-Art Extensions One example is the increasingly popular use of virtual reality tools to develop virtual prototypes in lieu of actual hardware. The world of virtual reality has added a significant enabler to the quest for accelerated product/process development. The ability to eliminate or greatly reduce the need for mockups, models and preproduction prototype versions of a required production part greatly accelerates the time-to-market. Associated costs are drastically reduced as well, allowing a company to accelerate the optimization of product via rapid cost-effective iterations. Additional capabilities are being investigated to give the virtual prototype the look and feel of the final product to the maximum extent possible. This includes sound, materials texture, vibration, and other sensory simulations that approach the real experience. 4.5.5 Pilots of Emerging State-of-the-Art Extensions One of the emerging state-of-the-art activities is the development of anthropomorphic models. The most advanced model of the human being currently exists at the University of Pennsylvania. Their model is called Jack. As sophisticated as this is, it still is not sufficient to simulate the human body accurately and completely. The Electric Boat Corporation has been involved in simulation of the man-machine interface in the development of the next generation submarine. In such tight quarters, the use of simulation tools for virtual prototyping becomes a powerful enabler towards optimizing the design. In similar fashion, the Caterpillar Corporation and other passenger vehicle compartment designers are using these techniques in lieu of building numerous physical models. Another emerging state-of-the-art applications is MUSE, Multidimensional User-oriented Synthetic Environment. This started as a Sandia (Albuquerque, NM) development where, of the many capabilities, assemblies of parts can be virtually observed and projected in three dimensions. The man-machine interface to the computer is via voice command. In one application a gear assembly can be activated so that all the moving parts are set in motion. Individual gears or parts can be removed, simply by voice command, while the rela35
tive motion of all the remaining pieces keeps going. The operator can observe the assembly by navigating as a microscopic point object either external to the object, on any surface, or inside any of the parts. In another application, CAT Scan information is utilized to input the rich data of a human head into the MUSE environment. In this application, the skin, skull, tumors, etc. are treated as objects which can be removed selectively on command. Navigation in and around the tumor is possible and can be simultaneously viewed by a team of physicians. Integrated digital prototype functionality of this type includes such capabilities as: Import of CAD data Navigation Constrained or unconstrained part movements Collision Event-based behaviors/actions Fully immersive Integration of analysis results Collaborative multi-site real-time participation.
MUSE has been spun off as a commercial venture and is now available. Sandia continues research in this area and has renamed the effort VRAM. 4.5.6 Future Stretch Goals This technology is on the path towards a total simulation of the performance of a design. By adding sound/acoustics, video, light, heat, vibration, electrical simulation, etc., a total application environment can be achieved. The goal is a simulation environment that is so sophisticated that every functional discipline that conducts an analysis of man-machine interface, manufacturing process, environmental test, or disposal operation can be demonstrated virtually without physically producing anything. In the area of man-machine interface, the ability to develop advanced models of the human being is a stretch goal. A related capability is the development of Haptic Feedback, i.e., the ability to touch and feel things virtually. The integration of all these capabilities promises to be a powerful capability in the development of new products and processes.
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5.0 ACTION PLANS The following Sections describe the action plans recommended by the team responsible for defining Rapid Product/Process Realization. 5.1 Systematic Approach to RPPR It is becoming increasingly evident that a systematic approach as defined in Section 4.2.1 is needed to implement IPPD and IPTs successfully to achieve Rapid Product/Process Realization (RPPR). Three actions are key to initiating a national multi-industry approach: 1. Develop an education and training strategy to capture the lessons learned from small, medium and large companies, in varying industries 2. Develop a generic robust suite of integrated design tools to facilitate improved multi-domain, multifunction design tradeoffs 3. Establish a generic set of common-sense design for affordability rules. These three actions are described more fully below by defining a statement of work, the relationship of each action to NGM attributes and imperatives, the relevant stakeholders, and the potential benefits for each action area 5.1.1 Develop Education & Training Module A training module should be developed and made available for distribution to all interested companies via a video teleconferencing vehicle, e.g., National Technological University. This educational module should highlight whats new in implementing Rapid Product/Process Realization versus existing best practices, particularly implementation of a systematic approach integrating the six key elements defined and incorporating the six enablers described in Section 4.2.1. Emphasis should be placed on using a structured methodology of establishing entrance and exit criteria as well as performance metrics for the process being performed. Relationship to Attributes and Imperatives The Education and Training Module, by design, will have an impact on all of the key RPPR enablers identified in Section 2 as they address the six NGM attributes. Stakeholders The following organizations are currently conducting education and training of DoDs Perry Directive on Implementing Integrated Product Process Development (IPPD) and Integrated Product Teams (IPTs): National Center for Advanced Technologies (NCAT), Georgia Institute of Technology (GIT), National Technological University (NTU) Video Teleconference Center, and Texas Instruments System Engineering Organization. Commercial companies (Boeing, Texas Instruments, General Electric, Ford, Chrysler, General Motors Cadillac Division, Hewlett-Packard, Motorola, etc.) as well as leading management consulting companies (Andersen Consulting, Science Applications International Corporation [SAIC], Dayton Aerospace, etc.) have been promoting implementation of IPPD/IPTs. Most organizations, however, do not sufficiently stress element (1) conducting comprehensive state-of-the-art technology assessment and element (4) establishing entrance and exit criteria and relevant performance metrics as discussed in Section 4.2.1. These two elements are critical in measuring the effectiveness of each development phase and thus achieving a total capability to implement effective RPPR. Potential Benefits In the old paradigm, most companies were designing from a not invented here standpoint, since they did not conduct a sufficient technology assessment of what was available for integration. In the NGM environment, significant downstream savings in time-to-market (50% minimum) and product life-cycle cost (50%
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minimum cost reduction) are realizable over conventional processes. The 5 to 15% increase in up-front development cost is more than offset by the 25 to 50% down stream reduction in manufacturing, logistics support, and warranty costs. In addition, process control will be greatly enhanced due to routine performance of material characterization, manufacturing processes characterization and active reduction of process variability. 5.1.2 Develop Generic, Integrated, Robust Suite of Design Tools Developing generic tools enables the designer in a cross-functional, distributed and virtual team to optimize affordability and performance across and between various engineering domains (systems engineering, electrical, thermal, mechanical, structures, etc.) and functions. The collaborative research should be focused on developing a robust but interoperable framework that all software suppliers can support, developing application protocols to ensure interoperability and enhance use of STEP, be based on CORBA-compliant intelligent agents (objects); and develop a vertically integrated systems engineering tool to perform alternative design trade-offs across and between multiple levels and domains of the end product design. A status meeting should be conducted with all key stakeholders to assess what piece of the pie each organization is achieving, synthesize gaps and redundancies, prioritize work to be done and establish a national research program to fill voids. Relationship to Attributes and Imperatives The action plan to develop a robust suite of integrated design tools will address the IPPD Methodology and IPPD Enabling Tools detailed in Section 2 of this report. Stakeholders The following organizations are involved nationally in striving to integrate pieces of an integrated tools suite: PDES Inc., DOE TEAM Product Design & Enterprise Concurrency, Office of the Secretary of Defense (OSD ) Joint Defense Laboratories (JDL) Manufacturing Science & Technology (MS&T) Panels Design & Manufacturing Engineering Thrust Area, NIST MEL/EEL/CSL, DARPA RASSP, Agile Manufacturing AIM Project, NCAT Enterprise Integration/Management of Technology Panels, EIA Engineering Operations Council (EOC), NSIA Research Engineering & Manufacturing Committee (REMC), IEEE, SME, Manufacturing Education Foundation, ASME, CAM-I Competitive Integrated Enterprise, NCMS Computer Integrated Operations Strategic Integration Committee/Rapid Response Manufacturing Project, SEMATECH, MCC, etc.; including key CAE/CAD/CAM/CAT/CAI software suppliers (e.g., Mentor, Cadence, CATIA, Unigraphics, Pro Engineer, etc.). Potential Benefits Very few CAE/CAD/CAM/CAT/CAI tools are integrated except in the semiconductor industry, where integrated circuits could not be designed and manufactured without an integrated Mentor, Cadence, and/or Consilium tool suite. However, even in the next level of electronic packaging (e.g., chips on substrates, printed wiring boards, glass etc.) the software tools are not integrated. Neither is there significant integration across and among the various engineering domains let alone manufacturing, test and inspection tools. It is estimated that an average of 15 to 25% of an engineers time is spent re-entering data from one tool to another. However, being able to optimize designs between and among domains and level-by-level system optimization is where the real payoff exists. It is estimated that 15 to 30% of the product life cost could be reduced if an integrated design tool suite was available. Even more importantly, an integrated tool suite would enable the systems engineer to perform concurrent electrical, thermal, and/or mechanical/structures design integration versus the present sequential design engineering process. 5.1.3 Establish Design for Affordability Rules Design for Affordability rules are to be made available for distribution to all interested companies to enable OEMs, suppliers, and partners to share a common rules framework for designing affordable products. The rules should be scientifically based wherever applicable, like materials characterization and six sigma process control characteristics. Reliability and maintainability are best achieved by designing for manufacturability and producibility. Test and inspection criteria need to be an integral part of the product design. The design for affordability rules need to be developed for common products and processes as well as for most common specific categories.
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Relationship to Attributes and Imperatives The design for affordability rules Action Plan will address all five RPPR enablers that have an impact on the Physical Plant and Equipment Responsiveness Attribute as defined in Section 2 of the report. Stakeholders The following organizations are involved nationally in striving to define the need for such a collaborative project: most manufacturing and engineering committees of industry associations, manufacturing-focused consortia (e.g., NCMS, CAM-I, SEMATECH, MCC, CIMS, etc.), BMAED, NIST MEL, DOE TEAM, OSD JDL MS&T, NCAT-Manufacturing Committee, AIA, EIA, NSIA, NSF, MIT Leaders For Manufacturing, Agility Forum, SME, etc. Many engineering schools, Industrial Engineering and Manufacturing Engineering industry advisory boards and/or focused manufacturing research programs are also involved. Potential Benefits Most companies are engaged in similar efforts to develop manufacturing rules for themselves, but are having difficulty obtaining company manufacturing development funds, considering the direct new product R&D needs. The effort, even if successful for a single division of a company or for an entire company, would not be as useful for obtaining suppliers and partners buy-in since the effort would have been inwardly focused and not necessarily generic. It is estimated that 5 to 15% of the product life-cycle cost could be saved if design for affordability rules were universally adopted and used by everybody. A national effort is probably only 2 to 3 times as costly as a single company developing such rules itself. 5.2 Integrated Computer Environment (ICE) Over the last 10 years, the power of the computer has expanded to the point where, in the near future it is feasible to expect seamless integration of all information in the enterprise, as visualized in Figure 5.2-1. The technology exists. What is needed is the proper emphasis to be placed on rapidly completing the standards activities underway to facilitate meaningful, real-time interoperability between various software and platform configurations. In the development of products and processes, the ideal Integrated Computer Environment (ICE) for RPPR facilitates: Team members designing, developing, and manufacturing in a highly concurrent, interactive manner across the entire Extended Enterprise Information being shared and archived through an integrated, logically centralized, physically distributed database spanning all phases of the product life cycle Product and process descriptions traceable to an unambiguous product and manufacturing process definition (e.g., geometric and performance models, tolerances, specifications, design analyses, bill of materials, acceptance requirements, manufacturing planning, methods, tooling, test equipment, supply chain, etc.) Process decisions, process requirements, and information flow managed and controlled by an Extended Enterprise-wide process facilitator Development and manufacturing risk minimized through the use of case-based reasoning, design optimizers for performance, schedule and affordability, effective application of lessons learned, rules-based design, producibility guidelines, and probabilistic design assessment Closely coupled or integrated computer applications that are automated for design, development iterations, optimization (including cost-performance trades), and seamless data transfer Proven intelligent, reconfigurable, closed-loop manufacturing capabilities that are seamlessly tied to product definition Advanced tools that free product team design and manufacturing members involvement in data generation and summation tasks and allow increased focus on decision-making and creative thought processes Support of both top-down and bottom-up design methodologies Capabilities for product and process life-cycle information to be archived in stable formats and media
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Enabling capabilities to conduct multiple, simultaneous Extended Enterprise product designs via joint ventures, supplier participation, virtual corporations, or any other multi-enterprise relationship Metrics maintained to guide continuous improvement for all processes. A key ingredient in the new ICE suite of capabilities is the ability to reconfigure or change any of these rapidly to address the ever-changing, unpredictable nature of the business environment. Accordingly, there will be a need to manage and control these capabilities and the information they provide.
Object Technology Operational Modeling Enterprise Integration Intelligent Scheduling Intelligent Sensors Active Agents SPC Data Management CAD-CAM CAM Material Transformation MRP JIT CIM Automation Robotics CBT EDI CAE TPM Virtual Reality APC
Enterprise Complexity
Supplier Partnerships
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1980
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Technology Trends
Figure 5.2-1. Technology Trends Relative to Enterprise Complexity Steps that should be taken rapidly to realize the ideal environment include: Standards Interoperable systems Modeling and simulation Identify and synthesize gaps and redundancies, with prioritization.
5.2.1 Standards The ability to use common mathematical data throughout the value-chain will be possible if all parties conform to the same standards. Developing and implementing systems that inherently comply to the standard will avoid the costly and time-consuming activity of building interfaces, translators, and converters. There is no technical reason, other than lack of standards, why a design team cannot have instant cost data available to it, to perform cost/performance trade-offs. There is no technical reason why, in the interest of accelerating time-to-market, a component of a design cannot be released incrementally, interfacing with MRP II systems triggering a procurement action, which then automatically schedules the part on the suppliers production floor. In like fashion, a projects computerized preferred parts file can interact on a daily basis with MRP systems to warn design teams that parts are or will be deleted as a result of lead times falling outside the procurement lead time window to meet the time-to-market requirement. These capabilities are some of the victims of interoperability issues that prevent plug and play as a result of the lack of a set of universally agreed standards. A review panel of independent, unbiased experts should be established, for the purpose of evaluating the status of standards activities and their likelihood to facilitate interoperability in the next 5 years. The study
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should identify the gaps that exist and make recommendations on how to accelerate the completion of this critical enabler. The review should encompass the following, as a minimum: PDES Inc. PDES/STEP NII NIIIP CALS, NAMT, SIMA, etc. Integrating Framework (TC184SC5WG1-CIMOSA, WEC-EIP, MAPLE [Purdue University], etc.) SEMATECH CIM Framework NCAT EI NET USAF Wright Laboratories Manufacturing Technology Directorate: EIF, EIP Agility Forum- KNA Report, AVE IMS (CIMS, NGMS) Telephone data/video interoperability (AT&T, MCI, SPRINT, etc.) NIST ANSI Others.
The studys results and recommendations should be published as a National Standard or as guidelines, and recognize the impact and influence of de facto standards emerging in the absence of formal standards. 5.2.2 Interoperable Systems Todays information technology systems, including software, hardware, communication technologies, and databases are not based existing standards and do not necessarily follow national, international, or de facto standards. This reduces the ability for plug compatible interchange of components and applications. While we wait for the set of standards to evolve, a list of seamlessly interoperable software and hardware tools should be generated. This will help the decision-making body of organizations to minimize the time consuming and costly task of force fitting the applications, with the associated continuing maintenance. Interoperable systems must include business, product and process development and manufacturing disciplines, as well as Internet, EDI, e-mail, World Wide Web, etc. interfaces. The list should contain the in-process activities to enable plug and play in the near future. It should be kept current so that it can be used as a source document for those with integration needs. 5.2.3 Modeling and Simulation The tools available today for modeling, testing and simulating processes, equipment and software changes are either not available or are too slow or too difficult to use. This reduces the ability to adequately test and model changes prior to implementation. The replacement of physical models with virtual models is underway. This technology, however, is in its infancy and must be enhanced and accelerated to the point where simulation replaces any physical process, hardware/software performance, and physical environment, singularly or in combination. Currently, physical models have evolved to a practical use state where optimization for size and shape are underway. To take maximum advantage of simulation, the ideal simulator must virtually integrate and replicate audio, acoustics, endurance, and environmental considerations, e.g., temperature, shock, vibration, rain, sand and dust, altitude, electromagnetic interference, etc. When this is accomplished, the time consuming task of formal qualification/validation testing will be minimized both in time and cost. The advantage of being able to optimize the performance-affordability trades in this manner will be a major competitive advantage tool. As important will be the ability to make changes to the design and immediately observe the effects of the change on performance in these environments or its impact on manufacturing processes and product yield. Another important area is the on-line/real-time simulation and modeling capability. These systems are computer systems that operate on-line with the manufacturing process, extracting real-time information from the process feeding the simulation system for prediction and decision support. These systems will model and
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constantly simulate the current and projected state of the systems based on actual equipment, product, and process status. They will be able to improve system stability by providing advanced information on potential process problems resulting in improved product quality. Integrated with this capability could be predictive control systems. Predictive control systems are process control applications which move beyond identifying current failures, to the point of understanding when failures of product or process will occur before they actually do. They could be used to predict yield on the manufacturing floor as the design evolves as well as dictating optimum maintenance intervals. These applications may leverage other technologies such as advanced simulation techniques and artificial intelligence. They will support increased up-time, reduced scrap, predict potential failures, avoid them, and help maintain stable manufacturing processes. A study should be conducted to determine the state of the technology in these areas. The study should synthesize, identify gaps and redundancies. Subsequently a DARPA or DOC/NIST Broad Agency Announcement (BAA) should be issued for significant R&D in this area. 5.2.4 Identify and Synthesize Gaps and Redundancies, Then Prioritize There is a high likelihood that many tasks will be redundant and that streamlining of the overall objectives and tasks must be accomplished. A facilitating organization would be required as well as ad hoc system integrators. A consensus-driven structured methodology should be used to establish study protocol. When the redundancies have been eliminated, the tasks then must be prioritized so that invested moneys can be utilized for the high-priority items first. 5.3 People and Culture To meet the NGM objectives relative to people and culture, the NGM paradigm requires that people (and organizations) transform to a paradigm of thriving in an environment of rapid, unpredictable changes in the markets, technology, processes and environments. Several key areas of research are required to provide a basis for: People, team, functional, and management selection and training Performance measurement and reward Individual new technology gestation and proficiency time constants Team mix of generalists and domain or subject matter experts Organizational structures accommodation of people movement and assignment, and Criteria for personal satisfaction with work assignments and sense of belonging to organizational forms and structures.
To address the above needs, the following research program of tasks, effort and task span times are recommended: Traditional technology and skill transfer Cognitive skill mechanisms and accelerators Secondary and higher institute rapid skill transformation curriculum Organizational concepts and structures for rapid team, technology and process change environments Personnel compensation and reward systems.
Traditional Technology and Skill Transfer (Task 5.3.1) People of different age and experience groups should be studied to determine what guidelines and training need to be provided. The following can provide semi-quantitative information to guide company actions to update their workforce or adjust to new conditions include: capability to learn and apply new technologies, criteria, metrics, individual background and other factors. It is expected that leading academic, government, and industry members with experience in human motivation and training would participate in or lead the effort.
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Cognitive Skill Mechanisms and Accelerators (Task 5.3.2) Research should be conducted in the physiological mechanisms that control learning and how they can be used to accelerate the learning process to transform the knowledge and skills of qualified personnel to one or more new technologies. Possible sources for such research include the Brain Institute of UCLA and the Institute for Human Potential of Philadelphia, among others. Secondary and Higher Institute Rapid Skill Transform Curriculum (Task 5.3.3) From the results of Tasks 5.3.1 and 5.3.2, above, academic institutions and organizations, with guidance from an industry steering group should introduce additions and/or changes to existing curricula on life-long learning, rapid learning and application experience. Organizational Concepts and Structures for Rapid Team, Technology, and Process Change Environments (Task 5.3.4) Drawing on current industry and the results of the above tasks of 5.3.1, 5.3.2, and 5.3.3, above, develop models for organization structures, education and training programs. Personnel Compensation and Reward Systems (Task 5.3.5) In the NGM paradigm, the compensation and reward structure is a key motivating factor. The outcome of tasks 5.3.1 through 5.3.4 should be synthesized into a comprehensive analysis that will provide guidance for NGM application. 5.4 Integration of Systematic IPPD Methodology, Computer Environment, and People- and CultureRelated Issues The manner in which people and organizations interact are strongly influenced by the robustness of the Integrated Computer Environment ((ICE) and the manner by which processes such as IPPD are systematically understood and applied. Research into the behavior of people and associated cultural issues were defined in Section 5.3, above, and should be used as a basis for additional research tasks addressing the influence and impact of the ICE and the ultimate interaction with RPPR. Key issues to be addressed in the research program include: The synergistic influence and value of the ICE in accelerating the productivity and rate of learning of the workforce The real value, in terms of skill enhancement and process familiarity, of focusing workforce training in a specific IPPD application, i.e., how quickly can a team be identified and assigned a product realization project and become fully effective, without prior team interaction and specific product knowledge Deployment Approach of the IPPD methodology Effectiveness of IPPD and the cycle time required by the team is greatly dependent on the manner by which the process is deployed by management. This includes communication techniques and methods fully to acquaint the organization supply chain members and customers with the precise manner that team, team member competencies, skills and capabilities will be aligned with supply chain and partners skills and capabilities Best practices and guiding principle database is required to include comprehensively the wide variation in company size, product variety, product realization geographic deployment and a range of other parameter influences the specific choice of IPPD approach and ICE deployment. Research tasks in support of the above issues should include: Influence on and value of ICE to productivity and learning IPPD effectiveness cycle time IPPD deployment methodologies
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Best practices/guiding principles database. Influence on and Value of ICE to Productivity and Learning (Task 5.4.1) A task should be undertaken to define a protocol of specific, different ICEs with various product and workforce attributes and characteristics. Design of the specific projects, measurement techniques, etc., would be a major element of the project. IPPD Effectiveness Cycle Time (Task 5.4.2) This task is completely different from the task in 5.4.1 in that it should focus on the need to understand how quickly a non-traditionally formed IPT, drawn from multiple cultures and nationalities can function as a fully effective team executing IPPD. This is of critical value to multi-national companies of both large and small size and is particularly important to newly formed entrepreneurial companies. IPPD Deployment Methodologies (Task 5.4.3) This task draws on the results of 5.4.1 and 5.4.2, above, and addresses the issues of task 5.4.2 but focuses on organization-wide communication, and reinforcement of policies and process issues. Lessons learned from Military Services Special Operations and Mission Forces should be included as a component of this study. Best Practices/Guiding Principles Database (Task 5.4.4) This task should be based on industry and institutional experience, but specifically on the results of task 5.4.1 through 5.4.3, above, as the primary basis for its construction.
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6.0 METRICS 6.1 Purpose An enterprise-wide performance management system is needed to develop change strategies for reducing cost, time, and investment while maximizing enterprise outcomes, e.g., employee morale, shareholder value, customer satisfaction, and public service in consort with the strategic intent, vision, mission and strategic plan. A performance measurement system must be structured to provide information for identifying the need for interventions in material, capital, energy, human, data, and technology to create value, improve processes, and eliminate waste. It must: Identify the cost of resources consumed in performing significant activities of the enterprise (Processbased Accounting) Determine the efficiency and effectiveness of the activities performed and of the utilization of resources (Performance Measurement), and Identify and evaluate the need for improving the future performance of the enterprise (Investment Management). Performance measures developed for the enterprise must include a set of broad metrics that relate to the enterprise processes. These measures must place greater emphasis on non-financial attributes, such as cycle time, schedule attainment, and process yield, to provide a product or process that delights the customer, not just meets specifications. A predictive accounting system based on the product life-cycle processes must be developed, particularly at discrete product feature levels, so one can design to target cost. Target cost is the application of activity-based costs to the traditional value engineering methodology to match feature cost to feature value to the customer. There is a need to develop a multitude of metrics to measure the progress of RPPR in the NGM environment. They include in-process and higher level metrics. A list appropriate to the company and its processes will evolve to be shorter than the one presented here. Such a list will be a mix of strategic-level metrics as well as operational level metrics. The most desirable set for a given situation will have the following characteristics: Few in number Simple, clear, and easily understood Applicable to most or all of the NGM attributes and processes Covering a wide range of industries Providing for benchmarking the individual company relative to the world. Business/Financial Development Human Resources Information Technology.
A list of mixed-level metrics is presented as a baseline arranged as:
They are not in any particular order nor are they prioritized since both order and priority should be a function of the particular company, its key processes, its competitive position, and its specific products and services. 6.2 RPPR Metrics B usiness and Financial Metrics Break Even Time (BET) - time required for all accumulated expenses in the development cycle (including equipment acquisition) to be recovered by the companys contribution margin (selling price less manufacturing, delivery and selling expenses
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Incremental revenue or % revenue from new products Increased revenue by month from earlier introduction Product development effectiveness index Time to prepare RFP/RFQ/Memorandum of Agreement for a subcontract or strategic business alliance, including specifications, statement of work (SOW) and terms and conditions Time-to-market, concept-to-cash Return on investment (ROI) Number of long-term agreements with partners/suppliers Percent of product development investment for market growth (predict gaps) Percent of product development investments for replacement (competitive threat or lead) Impact of RPPR on ROE and return on net assets If not first to market, number of months late vs. competition.
D evelopment Metrics Product development productivity improvement (more designs for same number of people or same output for less head count) Development cost Product life-cycle cost Number of To Be Determined (TBDs) at Preliminary Design Review (PDR) or A Review (commercial) Number of customer requested or required changes after program turn-on Number of engineering change notices (ECNs) after release to Manufacturing Ratio of ECNs after release to manufacturing to total number of changes Total number of changes Percent of changes by program phase First-time-through-test yield Number of new product developments per unit time Number of IPT teams Percent of functional organizations integrated in team on dedicated basis Percent on-time delivery for new developed products (as defined by customer) Time to develop next generation product vs. planned time Time-to-market vs. nearest competitor New product lifetime before next upgrade Number of cooperative engineering efforts. Human Resources Metrics Stability of core team (Percent change of core personnel over life cycle) Education and training (percent of revenue) Attrition rate of core competency skills and capabilities Percent computer literate Reconfigurability of teams (time, cost, robustness, scope). Percent tools interoperable and linked System response time at 100% loading Percent system utilization vs. time of day Percent total enterprise operability Percent IT of revenue.
Information Technology Metrics
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7.0 SOURCES
1. Banki, I.S. (ed.). Dictionary of Administration and Management. Los Angeles, CA: Systems Research Institute, 1986. 2. Beaumariage, Kimberly and Shunk, Dan. Issues in Migrating to Teamwork. Dearborn, MI: Society of Manufacturing Engineers Blue Book Series, 1991. 3. Block, Peter. Stewardship: Choosing Service over Self-interest. San Francisco: Berrett-Koehler Publishers, 1993. 4. Chesbrough, H.W. and D.J. Teece. When is Virtual Virtuous? Organizing for Innovation, Harvard Business Review 74(1) 1996. pp. 65-73. 5. Clausing, Don. Total Quality Development: A Step-by-step Guide to World Class Concurrent Engineering. NY: American Society of Mechanical Engineers Press, 1994. 6. Concurrent Engineering IEEE Spectrum 1991, pp.22-37. 7. Conkol, Gary K. The Role of CAD/CAM in CIM: The User Perspective. Dearborn, MI: Society of Manufacturing Engineers Blue Book Series, 1994. 8. Davis, S. 2020 Vision. 1991. 9. Delorge, Dale. Product Design and Concurrent Engineering . Dearborn, MI: Society of Manufacturing Engineers Blue Book Series, 1992. 10. Dumaine, Brian. The Trouble with Teams, Fortune, 5 September 1994, pp. 86-92. 11. Examples of CIE in Practice. Consortium for Advanced Manufacturing International, Competitive Integrated Enterprise Program. Volume III. Arlington, TX: CAM-I, 1993. 12. Executive Perspective . Consortium for Advanced Manufacturing International, Competitive Integrated Enterprise Program. Volume I. Arlington, TX: CAM-I, 1993. 13. Gartner Group. ERP Vendors. Gartner Group, 1995. 14. Gartner Group. CIM Scenario. Gartner Group, 1995. 15. Hammer, Michael and Champy, James. Reengineering The Corporation: A Manifesto for Business Revolution. NY: Harper, 1993. 16. Hunt, V. Daniel. (1987). Dictionary of Advanced Manufacturing Technology. NY: Elsevier, 1987. 17. Illingworth, Valerie, E.L. Glaser, et al., (eds.). Dictionary of Computing. NY: Oxford University Press, 1986. 18. John, Vernon, (ed.). Macmillan Dictionary of Materials and Manufacturing. London: The Macmillan Press Ltd., 1990. 19. Kamath, Rajan R. and Liker, Jeffrey K. A Second Look at Japanese Product Development, Harvard Business Review 1994, pp. 154-170. 20. Kaplan, R.S. and Norton, D.P. Using the Balanced Scorecard as a Strategic Management System. Harvard Business Review. 74 1996 pp. 75-85. 21. Khosla, P.K. Tools for Design, Manufacturing, and Integration. NSTC Subcommittee on Manufacturing Infrastructure, 1995. 22. Manz, Charles C. and Sims, Henry P., Jr. Business Without Bosses : How Self-managing Teams are Building Highperformance Companies. NY: John P. Wiley & Sons, Inc., 1993. 23. Marks, Peter. Process Re-engineering and the New Manufacturing Enterprise Wheel: 15 Processes for Competitive Advantage. Dearborn, MI: Society of Manufacturing Engineers Blue Book Series, 1994.
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24. Melny K.S.A. and Smith, R.T. Green Manufacturing. Dearborn, MI: Society of Manufacturing Engineers Blue Book Series, 1996. 25. McFarlan, F.W. and Nolan, R.L. How to Manage an IT Outsourcing Alliance. Sloan Management Review 36(2) 1995 pp. 9-23. 26. Miller, Landon C.G. Concurrent Engineering Design. Dearborn, MI: Society of Manufacturing Engineers Blue Book Series, 1995. 27. Muglia, Victor O. Concurrent Engineering Design. Dearborn, MI: Society of Manufacturing Engineers Blue Book Series, 1995. 28. Moore, Geoffrey A. Inside The Tornado. NY: Harper, 1995. 29. Pritchett, Price and Pound, Ron. Team Reconstruction: Building a High Performance Work Group During Change. Pritchett Publishing Company, 1992. 30. Rosenberg, Jerry Martin (ed.). Dictionary of Business and Management . NY: John Wiley & Sons, Inc., 1993. 31. Scaringella, Sal. Enterprise Performance Assessment Tool - Strategic Level. Bethlehem, PA: Agility Forum, 1996. 32. Scaringella, Sal and Erickson, Paul. Enterprise Integration Assessment Tool. Bethlehem, PA: Agility Forum, 1996. 33. Schumaker, Gerald C. Integrated Product Development Program Strategy . Air Force Manufacturing Technology Directorate, 1990. 34. Schumaker, Gerald C. Transitioning Affordable Technology. Affordability Exit Criteria Workshop conducted by Wright Labs Science & Technology, 1993. 35. Smith, Richard T. Manufacturing Myopia: Failure in Systems Realization. Dearborn, MI: Society of Manufacturing Engineers Blue Book Series, 1993. 36. Smith, Preston G. and Reinertsen, Donald G. Developing Products in Half The Time. NY: Van Nostrand Reinhold, 1991. 37. Spencer, Donald D. (ed.). Computer Dictionary . Ormond Beach, FL: Camelot Publishing Company, 1992. 38. Thomas, Philip R. Competitiveness Through Total Cycle Time. 39. Tichy, Noel M. and Sherman, Stratford. Control Your Destiny or Someone Else Will. NY: Harper, 1994. 40. Winner, Robert I. The Role of Concurrent Engineering in Weapons System Acquisition. Washington, DC: Institute for Defense Analysis, 1988.
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APPENDIX GLOSSARY Architecture. A definitive structure of some body of methodology, information, or knowledge. Similar to framework or taxonomy. The structure does not contain any of the methodology, information or knowledge just the definition of the classification or structural scheme. Artificial intelligence. A group of technologies that attempt to emulate certain aspects of human behavior, such as reasoning and communicating, as well as to mimic biological senses, including seeing and hearing. Specific technologies include expert systems (also called knowledge-based systems), natural language, neural networks, machine translation and speech recognition. AI is the branch of computer science that is concerned with developing computer systems capable of simulating human reasoning and sensation. AI involves using computers and software that, like the human mind, use stored knowledge to make decisions involving judgment or ambiguity. Authentication. A process for verifying the correctness of a piece of data. Autonomous agents. In object-oriented programming, an object that can both operate upon other objects and be operated upon by other objects. An agent is usually created to do some work on behalf of an actor or another agent. Bandwidth. In data communications, difference between the highest and lowest frequencies of a band. Used as a measure of the capacity of a communication channel, expressed in bits per second, or baud. Benchmarking. The search for and application of significantly better practices that leads to superior competitive performance; exchanging information with the best-in-class, as appropriate, discovering the benchmark enablers, adapting enablers to your culture to outperform competition in satisfying customer needs Business Process Engineering. A term introduced by Dr. Michael Hammer, Professor at Massachusetts Institute of Technology for performing a process (business activity) decomposition of the as is processes looking for value added and non-value added processes or activities in the total business enterprise. Value added processes are those that transform the input to a process into some other output, or change the shape of material like machining, forming, casting, or assembly. In business this analogy is more qualitative since a certain amount of planning is needed, as is scheduling; however expediting is non-value added. In accounting keeping debits and credits is necessary but analyzing rework cost is non-value added. Business case. This is a justification that investments will have an acceptable payoff. The justification must be made to those who make the selections of the various projects and can authorize expenditure of funds. Therefore, the level and types of presentations must be appropriate for the audience. Business unit. A profit and loss function of a legal entity, could be an enterprise for enterprise-integration purposes and scoping. Chaos. Science which, contrary to its name, reveals an orderly pattern in the universe. Client/server systems. A relationship between machines in a communications network. The client is the requesting machine; the server is the supplying machine. Closed-loop manufacturing. A control system with feedback. Variations in process parameters are detected by sensors and automatic corrective action is taken. CAD (Computer-Aided Design). A term applied to programs and computer systems used in designing engineering, architecture and scientific models. The process involves direct, real-time communication between a designer and a computer, generally by the use of a high-resolution display and a light pen, mouse, or graphics tablet. Some CAD applications create objects in two or three dimensions, presenting the result as wire-frame skeletons, as models with shaded surfaces, or as solid objects.
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CAE (Computer-Aided Engineering). Analyzes a design for basic error-checking, or to optimize manufacturability, performance and economy. Information drawn from the CAD/CAM design database is used to analyze the functional characteristics of a part, product, or system under design, and to simulate its performance under various conditions. CAI (Computer-Assisted Instruction). Instruction that uses automated devices and techniques, such as teaching machines, electronic media, programmed texts, or their combinations; and which is characterized by 1) small steps (modules) aimed at gradual increments in learning; 2) active and immediate response and feedback as required; 3) self-pacing, and thus 4) relatively low error rate. CAM (Computer-Aided Manufacturing). The effective utilization of computer technology in the management, control, and operations of the manufacturing facility through either direct or indirect computer interface with the physical and human resources of the company. CASE (Computer-Aided Software Engineering). A combination of techniques and tools aimed at building and maintaining software systems of all types large and small, commercial and scientific, on-line and realtime. CASE tools provide coverage of the software life cycle by providing auto analysis, design, implementation and maintenance as well as project management of software systems. CAT (Computer-Aided Testing). An application program that tests by modeling parts and product design and specifications through interaction with CAD/CAM. CORBA (Common Object Request Broker Architecture). An evolving international standard for open distributed computing infrastructure using objects that contain many inter-links to successfully interface with other objects. Concurrent Engineering. An earlier term used to describe attempts at employing all engineering disciplines in a simultaneous design process. Core competencies. Those key processes, products, organization and practices that discriminate your performance from competition and our vital to a companies success. Culture. A pattern of human behavior including thinking, speaking, acting, and interaction with artifacts. This pattern can be modified, as it applies to organization culture, by training, education, and by providing motivational incentives such as direct orders, threats, and reward systems. DBT (Design Build Team). Another term for IPT. Drivers. These are the most significant items affecting the result being considered. For example, cost drivers are those items most affecting cost. EDI (Electronic Data Interchange). Use of communications techniques to transmit documents electronically. EDI relies primarily on the development of standard formats for various business documents such as invoices, purchase orders, and acknowledgments. Electronic commerce. Paperless business communication, most likely over the Internet and/or other intercompany mechanism to perform normal business transactions; e.g., ordering, scheduling, transferring funds, etc. Enabler. Facilitators allowing the next generation manufacturing enterprise to reach a specific strategic objective and therefore the NGM vision for the enterprise. Enhanced Product Realization. A term similar to IPPD used by commercial companies. Expert systems. Interactive computer programs that help users with problems that would otherwise require the assistance of human experts. Expert systems capture knowledge in rules that can be communicated to others as advise or solutions. Program that presents the computer as an expert on some topic. The programs often simulate the reasoning process used by human experts in certain well-defined fields. Extended Enterprise. Includes the community of companies that collaborate to fulfill stakeholders needs. This includes both flexible partnerships in a value chain and/or a constellation network.
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Fiber optics. An advanced form of cabling that uses light to transmit data. This allows for very long distance between nodes. Flexibility. An enterprise concept that indicates the ability of an organization to respond or conform to new or changing conditions. Flexibility also carries the sense that a flexible organization can accomplish these changes more quickly and more economically than a less flexible organization. Fourth generation computer language. A user-oriented language that makes it possible to develop programs with fewer commands than those needed for older procedural languages. A non-procedural language. Also called a 4GL language. Fractals. An object (or set of points, curves, or patterns) which exhibit increasing detail with increasing magnification. Deals with curves and surfaces with non-integral, or fractional dimension. In computer graphics applications, this relates to a technique for obtaining a degree of complexity analogous to that in nature from a handful of data points; a method of describing real-world surfaces. Fractals can be used for stunning graphic effects, and can approximate the randomness of nature. The term fractal was coined by mathematician Benoit Mandelbrot in 1975. Framework. A framework is a structure in which to place elements of the domain of discourse being considered. The framework itself does not contain the information elements being groupware. Software that is designed for use in a network and serve a group of users that work considered, but is a repository in which to place the information logically on a related project. Holography. Method of storing data by making a multidimensional photograph on a storage medium. IC (Integrated Circuit,). A complex electronic circuit fabricated on a simple piece of material, usually a silicon chip. They were invented in the late 1950s by Jack Kilby (an engineer at Texas Instruments) and Robert Noyce (an engineer at Fairchild Semiconductor). IGES (Initial Graphics Exchange Specification). A standard file format for computer graphics that is particularly suitable for describing models created with computer-aided design programs. IGES offers methods for describing and annotating drawings and engineering diagrams. Information Superhighway. Commonly referred to as the National Information Infrastructure or Internet. Electronic infrastructure network linking millions of computers together for communication purposes. Information technology. Merging of computing and high-speed communications links carrying data, sound, and video. Infrastructure. A support system that connects and combines organizations, people, processes, systems and technology. Integrated Computer Environment (ICE). An interoperable multi-platform, multi-software computer environment that contains seamless, plug and play capabilities that permits transfer of business, engineering and manufacturing multimedia information in all directions. Integrated Product/Process Development (IPPD). A management process methodology that incorporates a systematic approach to the early integration and concurrent application of all disciplines and stakeholders (including customer, partners, and supply chain) that play a crucial part throughout the life cycle of products and processes by using Integrated Product Teams in a Integrated Computer Environment. Integrated Product Development. An earlier term used to describe product development versus concurrent development of processes. Integrated Product Teams (IPTs). The people that participate in the product and process design and that come from the functional organizations of the customer, lead company, partners or supply chain companies. Integration. A forming of individual elements into a unified whole. Intelligent agents. In object-oriented programming, an object that can both operate upon other objects and be operated upon by other objects. An agent is usually created to do some work on behalf of an actor or another agent.
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Internet. Commonly referred to as the National Information Infrastructure. Electronic infrastructure network linking millions of computers together for communication purposes. Originally established by DARPA to effectively link the university science and technology world together to better be able to build on other peoples work. Interoperability. The ability of hardware and software systems to mechanically and electronically interface to exchange signals and information through the use of industry standards. ISO. Acronym for International Standards Organization, an international agency responsible for developing standards for information exchange. Has a function similar to that of ANSI in the United States. Knowledge systems. A large body of knowledge in the form of rules and facts along with an inference mechanism that can be used to solve problems. An expert system. Malcolm Baldridge Award. Award provided by Society of Manufacturing Engineers for a team effort in developing and implementing highly integrated manufacturing functions resulting in significant productivity gains. Methodology. A procedure or set of procedures employed by a specific field of discipline. Metrics. A standard of measurement for a particular event or artifact. Modem. Acronym for Modulator/Demodulator, a device that translates digital pulses from a computer into analog signals for telephone transmission, and analog signals from the telephone into digital pulses the computer can understand. Provides communication capabilities between computer equipment over common telephone facilities. Natural language. 1) The fifth generation of programming languages. These languages use human languages such as English, German or French to give people a more natural connection with computers. 2) Ordinary human language; unlike precisely defined computer languages, it is often ambiguous and is thus interpreted differently by different hearers Neural network. 1) A computer simulation of the brain. 2) Self-organizing systems of simple interconnected processing units which possess a learning rule and are capable of learning. NGMS (Next Generation Manufacturing Systems.) A specific Intelligent Manufacturing Systems (IMS) managed by CAM-I. NII (National Information Infrastructure). Commonly referred to as the Super Highway or Internet. Electronic infrastructure network linking millions of computers together for communication purposes NIIIP (National Industrial Information Infrastructure Protocols). The application translators to enable the NII to function in a seamless open system way regardless of application or language. Non-procedural. Language that states what task is to be accomplished but does not state the steps needed to accomplish it. For example, the computer language for interacting with a database. It specifies what the user wants to know rather than the steps needed to produce the information, which are worked out by the computer. Open architecture. 1) A computer or operating system design for which detailed specifications are published by the manufacturer, allowing others to produce compatible hardware and software. Personal computer design that allows additional circuit boards to be inserted in expansion slots inside the computer to support addons. 2) An architecture that allows integration with other languages, conventional software programs, and graphics user interfaces. Open systems. A vendor-independent system that is designed to interconnect with a variety of products that are commonly available. Object technology. A programming technology that is generally more flexible and adaptable than standard programming. Object-oriented programming lets you create procedures about objects whose exact type is not known until run time. A level of computer abstraction beyond that of procedures and data. Object orientation involves thinking about the world as a set of entities or objects that are related to and communicate with one another.
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Plug and play. The ability to physically and electrically connect items without requiring the addition of modifying interface adapters or translators. PDES (Product Data Exchange using STEP). International consortium of over 20 major corporations as well as government organizations dedicated to accelerating the development and adoption of the ISO 10303 (STEP) standard for product data exchange. Product life cycle. The six stages of market acceptance of any goods: pioneering, growth, maturity, saturation, decline, and abandonment. Real-time. Descriptive of on-line computer processing systems that receive and process data quickly enough to produce output to control, direct, or affect the outcome of an ongoing activity or process. For example, in an airline reservations system, a customer-booking inquiry is entered into the computer to see whether space is available. If a seat is booked, the file of available seats is updated immediately, thus giving an up-to-date record of seats reserved and seats available. RPPR (Rapid Product/Process Realization). The expected result of taking the customer needs as input, and using, implementing and integrating IPPD, Computer Integrated Environment and trained multi-disciplined IPTs to produce products and process that meet or exceed the customers requirements. Seamless. A condition that allows an interface to transparently take place and properly operate without requiring intervention or knowledge of what enables it. Semantic net. A knowledge representation scheme that organizes human knowledge into a web like structure consisting of nodes objects, concepts and events connected by links that specify the nature of the connections. SEMATECH. A consortium jointly sponsored by Government (DoD) and semiconductor manufacturers and semiconductor technology suppliers focused on developing generic semiconductor manufacturing systems and technology to improve the overall global competitiveness of the US semiconductor industry. Simultaneous Engineering. A term used in some commercial industries to denote the concept of IPPD. Supply chain. The network of next and successfully lower tier suppliers who manufacture a product and/or service for a customer in the food chain up to the Original Equipment Manufacturer (OEM). Teleconferencing. Having a conference among people remote from one another who are linked by telecommunications devices. Considered an alternative to travel and face-to-face meetings, a teleconference is conducted with two-way video, audio, and, as required, data and facsimile transmission. TAT (Thrust Area Team). A group of 8 to 15 manufacturing executives from industry, Government, and academia focusing on developing Action Plans for a particular domain of the Next Generation Manufacturing enterprise; Business Practices, Work Force, Advanced Manufacturing Systems & Operations, etc. User interface. The means of communication between a human user and a computer system, referring in particular to the use of input/output devices with supporting software. Examples include the use of a mouse with bit-mapped graphics and the use of windows. Virtual enterprise. A working team relationship between parts of two or more independent companies located remotely but joined together through mutual agreement, to pursue a common business interest for a given period of time, but functions if they were a single organization. Virtual reality. Ability to physically be able to see and sense what the real world would be like through the use of and with information, in a multi-space environment. Voice recognition. System designed to recognize and understand the voice and vocabulary of the user.
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Change Management
January 1997
Prepared By: The NGM Business Practices Thrust Team
CONTRIBUTORS Gary Thompson, Rockwell-Collins, Team Leader & Lead Author Jim Bronson, HJB Associates Howard Esslinger, Texas Instruments Marc Field, Agility Forum Barbara Fossum, IC2 Institute, University of Texas at Austin and Reveille Technology, Inc. Gary Hurst, Texas Instruments Don Liles, Automation & Robotics Research Institute, University of Texas at Arlington Debra M. Amidon, Entovation International Ed Morris, Lockheed Martin Vought Systems Jim Peoples, Lockheed Martin and DSM Engineering Plastic Products Kenneth Preiss, Agility Forum and Ben Gurion University of the Negev, Israel Trent Shute, Rhne-Poulenc John Rannenberg, Agility Forum Scott Thurber, Air Products and Chemicals
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The NGM Framework

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CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 Imperative Definition ............................................................................................................................. 2 1.1 The Basics of Change ....................................................................................................................... 2 1.1.1 Need for Change Management ............................................................................................... 2 1.1.2 Change Continuum ................................................................................................................ 3 1.1.3 Degree of Change.................................................................................................................... 4 1.1.4 The Six Critical Steps of Change............................................................................................. 5 1.2 Enterprise Models............................................................................................................................. 7 1.3 Specifics of Change........................................................................................................................... 9 1.3.1 Framework for a Change Process.............................................................................................. 9 1.3.2 Objects of Change................................................................................................................... 9 1.3.3 Methods of Change............................................................................................................... 10 1.3.4 Strategies for Change............................................................................................................. 11 1.3.5 Traditional Change Process Model........................................................................................ 12 1.3.6 NGM Change Process Model ............................................................................................... 13 1.3.7 Assessing the Capability to Change ....................................................................................... 14 2.0 Relationships to NGM Attributes ........................................................................................................ 15 3.0 Barriers to Implementation .................................................................................................................. 16 4.0 Enablers to Overcome Barriers ............................................................................................................. 19 4.1 Leadership ...................................................................................................................................... 19 4.2 Infrastructures and Network Tools ................................................................................................. 20 4.3 Metrics and Benchmark Processes................................................................................................... 20 4.4 Change Process .............................................................................................................................. 21 5.0 Framework for Action .......................................................................................................................... 23 6.0 Sources ................................................................................................................................................. 24
ACRONYMS & ABBREVIATIONS CAD CPU DoD IPPD M&S NAMT NGM NIST OD PC PDM RPPR VV&A WWW computer-aided design central processing unit U.S. Department of Defense integrated product/process development modeling and simulation National Advanced Manufacturing Testbed Next-Generation Manufacturing National Institute of Standards and Technology Organizational Development personal computer Product Data Manager rapid product/process realization verification, validation, and accreditation World Wide Web
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EXECUTIVE SUMMARY Management of the change process in the Next-Generation Manufacturing (NGM) Company is the continuous, conscious process of applying a systematic methodology to position the organization for competitive advantage. Why is it Important? As the level of competition becomes more intense due to accelerating continuous change in the business environment, the ability to implement change inside the NGM Company becomes increasingly important. The ability to effectively change is rapidly becoming the same as assured quality a given for success. There are many ways to achieve it, but it is no longer a competitive discriminator it is just part of the ante to get into the game. Competitive advantage goes to the company that can manage change and embrace innovation, proactively, while minimizing perturbation of existing operations. Key Concepts Any organization, will change as a result of stimuli, either internal or external, and our willingness to change increases with perceived threat. It is the function of enlightened leadership to understand the need for change and to channel the efforts of the company to increase its competitiveness over time. The focus of change in the NGM Company must be routinely re-prioritized and coordinated to maintain a course toward its vision as the business environment changes. NGM companies must maximize efforts in high leverage areas and avoid optimizing any one segment at the expense of the total system. The basic targets of the change process (things that get changed) are: Strategic direction Organizational culture Processes (how work gets done) Individual behaviors.
Whats New? The process of continuous change and the accompanying environment of acceptance of change is now a fundamental business process (like accounting, marketing, manufacturing, etc.). The NGM Company requires a disciplined process dedicated to change process performance. The process invokes the ability to sustain continuous change and to prepare the organization to respond to calls for dramatic change. The mechanisms for change management are incorporated in emerging process models which: Recognize the need to change Define and articulate a desired future state Develop a clear and detailed assessment of the current state Design an integrated plan for the transition period Focus and sustain commitment of the organization to change in the direction of the vision Continuously reassess the need for change, whether or not the vision is being achieved, and start the process over.
Action Recommendations 1. Companies can implement systematic change management processes including risk/benefit analysis and change implementation methodologies that build bottom-up consensus for change. 2. Companies can use current analyses and models of change to make current change management policies more effective in existing enterprises.
1.0 IMPERATIVE DEFINITION The NGM Project team has identified a series of imperatives required to create a company with the attributes of a next-generation agile organization. These imperatives, if broadly implemented, create the capabilities necessary to succeed in manufacturing in the 21st Century competitive environment. A critical imperative is the ability to adapt in concert with the rapidly changing global competitive environment foreseen for the future. Change management in the NGM enterprise is the continuous process of applying deliberate, continuous change to the current state of an organization to achieve a more competitive future state. The change process must be robust and able to constantly deal with ripple effects throughout the business enterprise. The ability to manage continuous change with proficiency, creativity, and innovation will be the true competitive discriminator of the future. External environmental changes continuously impact every business, and are increasing in magnitude and velocity at, what feels to many industries to be, an exponential rate. Therefore, the ability to change and to manage change better than competitors is growing in importance as companies seek to achieve dynamic equilibrium in an increasingly volatile global marketplace. The NGM Project has defined the proficiency to capitalize on the inevitable continuous change as an imperative for the successful Next-Generation Manufacturing enterprise. 1.1 The Basics of Change NGM has developed a set of six core attributes that define the future manufacturing enterprise in a window of time 10 to 15 years from today. The theme behind these attributes is a vision of highly dynamic enterprise with robust, flexible business practices, personnel skills and behaviors, and physical capabilities that can sustain world-class competitiveness in an ever-changing global competitive environment. As indicated in Table 1.1-1, efficient change process management is a key imperative underpinning each of the attributes essential to next-generation competitiveness. Table 1.1-1. Relationship Between Change Management and NGM Attributes
NGM Attribute Customer Responsiveness Physical Plant & Equipment Responsiveness Teaming as a Core Competency Human Resource Responsiveness Global Market Responsiveness Responsive Practices & Culture Weight of Relationship High High High High High High Explanation Change capability allows constant product or service tailoring to meet customer desires Planned & efficient change of capabilities permits match & flexibility to needs Change enables team composition to meet evolving tasks Ingrained culture of change supports continuing knowledge growth Strategies need to use global resources & plan for global marketing/distribution Continuous change management encourages flexibility to adopt and accept
1.1.1 Need for Change Management Forecasts for the 10- to 15-year horizon of interest to NGM are not in alignment, but most agree on two facets of the future state. First, that the business environment is changing, and the rate of change is accelerating. This is driven principally by the exponential growth and global availability of information, technologies, and technology-based infrastructure, as well as the improving global transportation infrastructure. Second, the forecasts agree that accurate, detailed forecasting over a long time horizon is impossible and cannot be used to
build a set-point, long-term plan that will ensure a competitive position in the future. Therefore, the logical conclusion must be that for a company to succeed in the future, it must have a robust change process one that can continuously re-tune businesses processes to support managements vision and react quickly to changes in the business environment. That management vision must also be continuously reinforced among all the stakeholders employees, partners, customers, equity holders, etc. Each must understand that the broad vision will remain constant, but that tactical execution strategies and short-term goals will probably face serious disruption as unforeseen events deflect a companys planned course. This is not unlike the planning and execution of an expedition that must constantly change tactics as it faces disruptions (weather, fire, pestilence, etc.) en route to its destination. 1.1.2 Change Continuum Companies can be positioned on a continuum (Figure 1.1.2-1) which shows levels of change responsiveness. The continuum is bounded at one end by the refusal to change, with the opposite extreme being proactive change. Between the extremes are an infinite number of positions, as the responsiveness to environmental conditions shifts from no response to one of quick response to one of driving change (i.e., actually creating change in the company, industry, or market). Companies determine their position on the continuum by making decisions on how to cope with technology, competition, and socioeconomic conditions over time. However, the dinosaur company position is more often the result of ignoring the need to innovate and change rather than a conscious decision not to change.
Continuum of Enterprise Approach to Change & Innovation
Dinosaur
Chooses to Compete in Places Less Affected by Change
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Always in a Catch-Up Mode
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Copy, Quick Imitator
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Adopts New Ideas Readily to Improve
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Continuously Creates New Ideas & Leading-Edge Practices; Agile
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Figure 1.1.2-1. Companies determine their position on the continuum of approach to change and innovation by making decisions on how to cope with technology, competition, and socioeconomic conditions. The double line between Laggard and Imitator indicates a critical point in ability. In most cases, it is not advisable to maintain a strategic position to the left of the double line, which leaves the company always surprised by a competitive threat. In a global and dynamic environment, companies that lag will be run over by those that quickly imitate or do better with a proactive plan. While it is possible to allow some processes to drift to the left, the company vision and system must be planned and executed to push further to the right. Successfully transforming to the NGM state and maintaining a robust, continuous change process requires management to articulate and implement a clear vision for the business. It is difficult to overestimate the value of the vision and the change process that facilitates its achievement. The four principal elements of an NGM Company (people, technology, business processes, and integration) must all be supported and aligned with integrated metrics down through all levels, in all processes and functions, of the organization. John Kotter, in his recent book, Leading Change, stated that complacency, weak guidance, under-communicating the vision, allowing obstacles, and not anchoring the changes in new company culture are the principal modes of failure to maintain change successfully. If unempowered people are micro-managed by multiple layers in a risk-adverse system, change will not be sustainable and will have tenuous success in the short term. Management must help the stakeholders understand that the change process for a specific task will have measurable points of success, but that there is no end to the total business change process. Although children approach change with delight and a sense of adventure, most adults generally do not. It is a disruption, causes extra work, and is viewed as an unrewarding risk not an opportunity, as proactive man3
agement would like everyone to believe. Approaching innovation as a keynote facilitates and reinforces creativity, which can be a powerful way to maintain enthusiasm for change and make the change process personally rewarding. Actively reinforcing the need for continuous education of all the resources, including partners and customers, is also a powerful way to inculcate the belief that change is continuous, inevitable, and must be embraced. The need is to expand personal knowledge to maintain employability and understand new technology and business processes. This sets the stage for introducing innovation as an essential competence of the next century. Fulfilling personal knowledge needs and promoting successful innovation are locked together, and both are mandatory for maintaining a competitive edge. For most companies, opportunity comes from outside their core market or technology area. In other words, companies can be blind-sided by a competitive intruder from left field or they can miss an opportunity to adopt and innovate using a development from an unrelated field. If they dont keep their sensors on, some competitor will take the opportunity to market. A robust change process is needed to exploit such opportunities. 1.1.3 Degree of Change The amount of change in response to a stimulus varies. Small, incremental changes may improve the performance of existing processes over time. Such changes generally allow the company to remain inside the existing paradigms. However, such incremental changes may not be sufficient to deal with the competitors that are evolving in the global marketplace today. Changes of increasing magnitude (i.e., transformational changes that cause companies to move outside the box of the current paradigms and apply more radical changes to the business processes) are often required to respond to changes of increasingly greater discontinuity in the global competitive environment. Figure 1.1.3-1 illustrates these thoughts.
What is Possible?
Breakthrough Potential Current Potential
Current Performance
Perfective
Transformational
Source: Breakthrough Thinking and Future Scouting in the Supply Chain, Lindsay Collier, CAM-I, SSCM 3rd Quarter Meeting, Rochester, NY
Figure 1.1.3-1. While incremental change can perfect existing processes, major changes in the competitive environment demand commensurate transformational responses. With these frameworks in place, we can now describe major types of changes that an enterprise may want or need to adapt to the marketplace and competitive environment. The types of change described are derived from work done in The Corporation of the 1990s Research Program begun in 1984 at the Massachusetts Institute of Technology (MIT). A group of companies teamed with educators and researchers at MIT to investigate the impact of new information technologies on organizations. Their work is documented in the book, The Corporation of the 1990s, Information Technology and Organizational Transformations. The model shown in Figure 1.1.3-2 identifies change levers that can be used to cause an enterprise to react differently to market forces.
External Technological Environment Structure
Strategy
Management Processes
Technology
External Socioeconomic Environment
Individuals & Roles Culture Organization Boundary
A Systems Approach is Mandatory!

Source: The Corporation of the 1990s, Information and Technology Organizational Transformation edited by Michael S. Scott Morton, Oxford University Press, New York, 1991
Figure 1.1.3-2. Key change levers can help companies react responsively to market forces. This framework identifies three primary types of change: 1. Cultural changes, which include the elements of structure, management processes, individuals, and roles 2. Strategy changes 3. Technology changes. This way of looking at the change framework recognizes that culture, strategy, and technology are complex, interrelated systems. Changes to any one of the elements will have ripple effects through the entire system. Therefore, regardless of the type of change initiated, the enterprise must consider and deal with effects normally associated with different types of change rather than only those initially considered. 1.1.4 The Six Critical Steps of Change The path to organizational change is a dynamic six-step process as described below. 1. Recognize the need for change. Identify the forces inside and outside the organization that drive change; determine the degree of choice related to whether or not to change, and if change is dictated, the degree of change required; establish whether the change is significant enough to cause the core mission to be modified or whether fine-tuning of key strategies and tactics is sufficient. 2. Define and articulate the desired future state. Describe in detail the desired conditions, specifying the organizational structure, reward system, personnel policies, authority and task-responsibility distributions, managerial values and practices, performance-review systems, relationships with external groups, and expected organizational performance outcomes. The future state should describe the change leaders view of the organization at a specific time far enough in the future to provide a sense of the feasibility of the projected changes, while bearing in mind the core mission of the enterprise.
3. Develop a clear and detailed assessment of the present. A detailed look at the present system is mandatory before determining an action plan for achieving future goals. It is important to set priorities for change, identify relevant organizational subsystems, and assess their readiness and capability for the contemplated changes. The analysis should consider present as well as future vision and a provide detailed scenario of the desirable future condition. Such gap analysis clarifies the work required to move the organization through the transition stage, and provides data to make informed choices about actions to be taken. 4. Design an integrated activity plan for the transition period. Create an activity plan that specifies the critical activities and events of the transition period when first moves will take place, when meetings will be held to clarify roles, what information will be communicated to whom on what day, and when new structures will start to operate. The plan should have the following characteristics: Relevance activities are clearly linked to the change goals and priorities Specificity activities are clearly identified rather than broadly generalized Integration the parts are closely connected Chronology there is a logical sequence of events Adaptability there are contingency plans for adjusting to unexpected forces.
5. Focus and sustain commitment during the transition state. In the transition state, the strategies for managing the changing of an organizations work and for getting the commitment of the necessary people and groups go hand in hand. Strategies for getting commitment include problem-finding, role modeling, changing reward systems, and finally, forced collaboration with specific allocations of responsibility. 6. Continuous assessment and course correction. Throughout the steps of change, continuous assessment is performed to ensure that the planned change are on track toward the overall vision, and to determine what corrections are required to stay on course. These six steps (Figure 1.1.4-1) provide organizing principles to guide thinking and actions to cope with the complexity of contemporary organizational life and the challenges of managing change in turbulent environments. They also provide a framework to guide discussions of more specific thinking on processes used to apply change to complex systems. Since companies are highly complex systems, we have applied research from many disciplines to build the NGM model for change in the manufacturing enterprise.
Step 1 Recognize the Need to Change Step 2 Define & Articulate Desired Future State Constant Reassessment & Realignment Step 3 Develop Clear, Detailed Assessment of Current State Step 4 Design Integrated Activity Plan for Transition Period Step 5 Focus & Sustain Commitment of Organization to Process Step 6 Reassess the Need for Change and Start the Process Over
Figure 1.1.4-1. Effective change management requires a disciplined, proactive process that includes the ability to continuously assess progress.
1.2 Enterprise Models The NGM Project focuses on manufacturing companies and the attributes required to succeed in the 21st Century. It is therefore appropriate here to describe a simple model of a manufacturing company and the key interactions that take place inside the company and between it and the external environment. This defines the requirements that our change process management model must meet to enable a manufacturing company to transition to the emerging competitive environment. Simple Enterprise Model In simple terms, an enterprise is a set of activities that transform inputs, such as raw materials, into outputs that are seen as valuable by customers (Figure 1.2-1), using control mechanisms and resources. Control mechanisms comprise: The mission of the organization The organizing principles of the company The goals and objectives the business has set The market and industry environment in which the company competes The laws and regulations of the nations or states in which the company does business. Resources that a business uses are: People Capital (money, land, building, facilities, and equipment) Data, information, or knowledge about products and processes Relationships with other companies (suppliers, customers, partners, and competitors). Controls
Triggers to Do Activity, Conditions that Govern the Activity
Inputs
Things Changed by the Activity
Activity (Process/Transformation)
Outputs
Things Produced by the Activity
Resources
Things Used by the Activity
Figure 1.2-1. Simple Enterprise Model Expanded Enterprise Model Control mechanisms are typically manipulated through the strategic decision processes of a business and are usually accomplished by senior executives or owners. Resource mechanisms are typically manipulated by support processes. All of these mechanisms must be coordinated with the true transformation processes the activities that actually convert inputs into outputs. These transformation activities are the value-creating operating processes. With these definitions in mind, we can expand our simple picture from Figure 1.2-1 into the more complete view shown in Figure 1.2-2.
Controls
Driving Forces & Laws Environment Goals Organizing & & & Principles Regulations Market Objective
Strategic Processes
Inputs
Information, Materials, & Energy
Activity Satisy Customers Operating Processes
Outputs
Products, Services, & Information
People
Knowledge Capital Relationships
Resource Processes
Resources
Figure 1.2-2. Expanded Enterprise Model Summary Enterprise Model This view of the business, however, is incomplete without positioning the business in the marketplace of suppliers on the input side and customers on the output side. The value-adding operating processes must: Select a set of customers a source of knowledge from which to learn Align corporate competencies and available technologies to create solutions to customers needs Develop products (outputs) that provide solutions to the customers needs and can be offered in a way that customers perceive value relative to the price Develop manufacturing processes to produce the products in a cost-effective way Develop and maintain relationships with all suppliers who provide inputs to the business, so that those costs do not erode profits. This picture (Figure 1.2-3) is the model within which our discussion of change management is framed.
NGM Extended Enterprise
Market (Potential Suppliers) Information/ Material/ Services/ Energy
NGM Company
Strategic Processes
Goals/Objectives, Organizing Principles, Laws/Regulations, Environments & Markets
Market (Potential Customers) Products/ Services/ Information
Value-Creating Processes
Create Manufacturing Processes Establish Supplier Relationships Market, Distribute, & Service Invent, Create, or Design Perceived Market Potential
Suppliers
Customers
Resource Processes
People,Capital,Knowledge, & Relationships (Product/Process/Information)
Results Indicators
Figure 1.2-3 NGM Enterprise Model
1.3 Specifics of Change In their research, the NGM Project members found a multitude of information already in existence regarding the approaches that have been used in applying change to complex systems. Most of the work relevant to business can be found in the documentation of the work in Organizational Development (OD) activities inside companies. Very little information can be found on rigorous studies of change applied across company boundaries, as in supply-chain activities (extended enterprise) or across industries in total. The following sections contain key concepts that were used to construct the simplified six-step change process model described above. These concepts help to build a solid foundation of understanding on which the simplified six-step model rests. 1.3.1 Framework for a Change Process In their book, Managing Organizational Change, Patrick E. Connor and Linda K. Lake describe a natural change process natural in the sense that however it starts, it would progress on its own to some organizational conclusion, regardless of whether there is any interference. This model defines the need to understand the destabilizing forces, both inside and outside the company and it establishes a framework for a change process by addressing: The Objects of Change Individual task behaviors Organizational processes Strategic direction Organizational culture The Methods of Change Technological methods Structural methods Managerial methods Human methods Change Strategies Facilitative strategies Informational strategies Attitudinal strategies Political strategies. 1.3.2 Objects of Change Changes in individual task behavior are frequently made because work is of central importance both for individuals and for society-at-large. Historically, attempts to change task behavior centered on simplifying jobs, frequently to a highly routine, predictable, and programmed extreme. More recently, change attempts have emphasized complexity, multiple dimensions of the task, and human factors. Task characteristics most commonly treated are: skill variety, task identity, task significance, autonomy, feedback, and interaction opportunity. Frequently, basic organizational processes are the target of change. Some especially important ones are: control, reward, appraisal, and decision processes. Control processes ensure that actions take place as planned. This assurance takes two forms, preemptive and reactive. Preemptive control is anticipatory; it attempts to influence the organizations environment, to shape its direction. Reactive control is regulatory; it focuses on operations and their deviation from standards. Reward processes are significant ways in which an organization and its members can be affected. Who gets rewarded, for what behavior, and how, are crucial to most members of most organizations. For years, decision-making in organizations was considered to be an issue of centralization, or the degree to which authority is distributed throughout the organizations membership. In the last decade, however, a slightly different view has been emerging. The process called decisionmaking now also entails who contributes how much, in what way, to what decisions.
A change in strategic direction can be implemented by altering the direction that an organization takes. This change can take place at the domain level (a domain consists of claims that an organization stakes out for itself). These claims are set forth mainly in terms of the products or services that an organization produces and their actual or potential customers. Attempts to change organizational domains are therefore attempts to change organizational identity. It often means changing the firms structure, its management, or even its collective identity. Culture is a pattern of beliefs and expectations shared by the organizations members. These beliefs and expectations produce norms that shape the behavior of individuals and groups in the organization. Culture comprises the behavioral patterns, concepts, values, ceremonies, and rituals that take place in the organization. Cultural values provide employees with a sense of what they ought to be doing and how they should behave, consistent with organizational goals. Culture represents the emotional, intangible part of the organization. 1.3.3 Methods of Change There are four distinct approaches to achieve goals that improve a businesss competitiveness: 1. 2. 3. 4. Technological change effect change by altering production processes Structural change modify certain roles and relationships Managerial change using administrative actions Human change educate, train, coach, and counsel people.
As these approaches are discussed in the following paragraphs, it is important to remember that a successful change initiative will usually integrate elements from all four approaches. Technological change means changing how the organizations output is produced. System-wide computerization of a manufacturing process is one example of such a change. Structural change involves altering various organizational dimensions or creating structural mechanisms. Effecting a change by structural means can involve any of the following dimensions: complexity, formalization, centralization, and coordination. The two most commonly used managerial change methods are: Reward systems to promote a move from the status quo to the new state Labor/management cooperation that can provide a means for change in a positive and constructive manner. The organizations reward system is often a good place to begin a change effort for the following reasons: Use of an innovation-keyed strategy for the change process can lead to inspirational action rather than creating a threatening environment. Pay, bonuses, and promotions are important to employees and managers alike. If a change involves issues with which people are unfamiliar, such as creating self-managing teams, response may be slow or unfocused. Tying a change effort to the reward system gets peoples attention. Beginning a change effort with the reward system gives a clear indication that the organization is committed to the effort. Too often, change programs begin with trivial or superficially symbolic actions. Most organizations have problems in their reward system. Perceptions of inequity, salary compression at the top of scales, poor administration, and rewards based on factors other than performance all compromise the potential of the system to motivate personnel. Revising or overhauling a reward system lays helpful groundwork for change. Beginning with something near and dear to the hearts of most organizational members can pave the way for changing or dealing with other problems. Successful changing of the pay and promotion system can serve as a model for the way other changes can be managed.
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Compensation systems tend to be tied closely to other organizational systems and procedures; beginning with the former can help identify problems with the latter. Performance appraisal, control, job design, accounting, and communication are all issues that can be highlighted by attempts to change the compensation system. In fact, the need for such changes may not become apparent until changes in pay and promotion are in place. A labor/management participation agreement does not replace the collective bargaining agreement between the union and company. Rather, it is concerned with improving employee morale, solving production and work/technology problems, developing training programs, and the like. With mutually understood and desired objectives, the parties hope to improve the climate for change. Human change methods effect change through the people in the organization, rather than through procedures, structural relationships, or other impersonal means. Two principal methods are the major instruments of people change: education and training, and organizational development. Education and training upgrade peoples knowledge, skills, attitudes, and even beliefs. Such programs cover everything from managing stress to improving communication skills. Organizational development concepts and techniques help bring about organizational change in the service of improved productivity. The hallmark of organizational development is its emphasis on planned interventions into various aspects of organizational life. Its practitioners intervene in individual, group, and system-wide processes and practices, with the goal of improving organizational and employee climate, values, health, functioning, and well-being. 1.3.4 Strategies for Change Selection of a change strategy is based on: The time available for the change Its extent (i.e., the number of individuals and organizational units affected, the number of behaviors that need to change, and the importance of the changes to the individuals involved) The characteristics of the target The resources available to implement the change. Four types of strategies are generally available for effecting change: Facilitative, Informational, Attitudinal, and Political. Facilitative strategies assist the change target in making the change or use the targets abilities or resources in conducting the change. Such strategies make it easier for the change target to accomplish a given change program. Facilitative strategies are best in situations where members of the target group have some sense of what they want to do but lack the means to do it. Informational strategies are based on a simple assumption: target groups will act rationally in the face of factual information; moreover, given adequate information they will recognize the problem and develop a mutually agreeable solution. Informational strategies are indicated when it can be accurately assumed that target group members lack the information they need or possess information that is incorrect or misleading. It is further assumed under such circumstances that once informed, people will help with the change programs implementation. Attitudinal strategies are based on the premise that a change in attitude will either produce a change in behavior or help maintain a behavior that already has been changed. Such strategies frequently mean that those who favor the change send biased, persuasive messages slanted as to the information selected, the method of presentation, or the use of attitude-changing techniques. Attitudinal strategies are indicated when there is no requirement for speed; when the planned change is extensive; when members of the target group are not favorably disposed toward the change; and when the change agent can bring persuasive, attitude-changing skills to the effort. In general, such strategies are appropriate for long-run rather than temporary change. Political strategies are those that depend on giving, withholding, competing, or bargaining for resources so as to accomplish the planned changes objectives. Political strategies can occur in a blatant do it or else coercive manner or more subtly, as in scratch my back, Ill scratch yours. They can also occur from the topdown, bottom-up, or some other direction. Resources in political strategies may take any form: budget, per11
sonnel, new equipment, opportunities to be placed on a fast-track promotion list, and so forth. Political strategies are indicated to the degree that the change agent controls such resources. On balance, power-type political strategies are indicated when the proposed change is to be accomplished quickly, the change is not extensive, members of the target group are not favorably disposed, and the change agent controls the necessary and valued resources. On the other hand, more complex political strategies are indicated when speed is not necessary, the change is relatively extensive, the target is more favorable, and again the agent controls the necessary and valued resources. 1.3.5 Traditional Change Process Model A broad spectrum of change process models are available. Change in the structure and operation of complex organizations is not an invention of the agility movement, but agility places a high premium on the ability to sustain and manage a constant change business process. Traditional change models have characterized the nature of organizational systems and developed flow models to change the operation of those systems from their current state, through some transitional state to a defined future state. These are ways to implement change toward a vision, but not necessarily to sustain a continuous assessment and change process. Organizations as Social Systems. Since business organizations are made up of people, they are social systems, and the behaviors associated with social systems must be accounted for in any change initiative. Various subsystems each have their own identity and purposes, but their activities must be coordinated or the parent system cannot function. The separate functions of production, sales, finance, and development must all be integrated. Organizations as Political Systems . As in classic political systems, people at the top have more power than people at the bottom. Political behavior is behavior designed to further the goals of a person or group, more or less regardless of the effect on others it is getting the votes. Some rules of political system behavior are vastly different from rules of social system behavior. Some managers operate under social-systems rules, others under political system rules. Organizations as Input-Output Systems. Organizations can also be viewed as input-output systems, transforming raw materials into products and services. One must also consider the attitudes, values, beliefs, and priorities of the organizations leaders. For example, if quality is all-important as a priority, structures and tasks must be organized to achieve optimum quality in the process of moving inputs to outputs. Careful inspection of raw material, decisions close to the work flow, distributed power all support such priority. In their book, Organizational Transitions, Managing Complex Change, Richard Beckhard and Reuben T. Harris describe the change process as involving three distinct conditions: the future state where the leadership wants the organization to be, the present state where the organization is now, and the transition state the set of conditions and activities that the organization must go through to move to the future. Beckhard and Harris further describe the change process in a large complex system as being capable of: Setting goals and defining the future state, or organizational conditions, desired after the change Diagnosing the present condition in relation to those goals Defining the transition state activities and commitments required to reach the future state Developing strategies and action plans for managing this transition
These authors offer the model in Figure 1.3.5-1 as a map of the traditional change management process.
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Why Change? Determining the Need for Change Determining Degree of Choice About Whether to Change
Defining the Desired Future State Getting From Here to There: Assessing the Present in Terms of the Future to Determine the Work to Be Done
Describing the Present State
Managing During the Transition State
Source: Organizational Transitions, Managing Complex Change by RIchard Beckhard and Reuben T. Harris; Addision-Wesley Publishing Company, Reading, MA, 1987.
Figure 1.3.5-1. Change Management Model (Beckhard and Harris) 1.3.6 NGM Change Process Model Understanding the basic concepts of change outlined above, we can now understand the context within which the NGM change process model (Figure 1.3.6-1) is developed. The basic elements are: Recognize the need to change Define and articulate the desired future state Develop a clear and detailed assessment of the current state Design an integrated activity plan for the transition period Focus and sustain commitment of the organization to change in the direction of the vision of the future state Continuously reassess the need for change, whether or not the vision is being achieved, and start the process all over again.
Step 1 Recognize the Need to Change Step 2 Define & Articulate Desired Future State Constant Reassessment & Realignment Step 3 Develop Clear, Detailed Assessment of Current State Step 4 Design Integrated Activity Plan for Transition Period Step 5 Focus & Sustain Commitment of Organization to Process Step 6 Reassess the Need for Change and Start the Process Over
Figure 1.3.6-1. The NGM Change Model leverages accepted precepts of effective change management to provide a generic model for manufacturers to manage change in transitioning to the next generation.
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This six-step process is an imperative for the NGM Company. The model is held at a generic level so that it not be seen as a quick fix or a prescription that can magically make a company competitive. It does, however, capture the essence of the change process in which a company must be highly skilled to be a true NGM Company. It is based on proven organizational development theory and can be mapped directly to all the examples of outstanding organizational change in todays leading-edge companies. 1.3.7 Assessing the Capability to Change Organizational leaders must understand the total organizational system (formal structures plus relevant environment) as a prerequisite for managing change, and must demonstrate their own commitment to effectiveness, excellence, and improvement. They must be willing to invest in training, relocation of decisions, and reorganization to achieve their priorities. Operationally, these leaders must be ready to deal with and create: Changes in the environment : Physical workplace structure Organizational adaptability Steadily increasing rate of change in technology and its impact on the marketplace Increased requirement for employee safety Changes in organizational priorities: Market- vs. technology-driven Quality vs. price priority Continuous education and training for all employees Changes in structures: From functional to business or matrix structure Parallel structures and temporary systems Changes in the ways work is done: People managing their own work Inspection closer to work Changes in personnel policies: Rewarding innovation and creativity along with production and stability Continued emphasis on equal opportunity issues Managing toward credible employability instead of guaranteed employment Changes in roles : Building more independent entrepreneurial groups in a large organization Decentralized tactical decisions Changes in culture: Preparing to eliminate traditions Reexamining current beliefs, assumptions, norms and customs Explicitly espousing core values Valuing intangible assets (people, information, knowledge) Supporting individual and agile leadership. A crucial need is the ability to assess a companys capability to change. An emerging tool for that purpose, the Enterprise Change Proficiency Profile, is being developed by Paradigm Shift International. The tool rates 25 critical business practices as to level of competency and plots them in a wheel pictograph not unlike a radar display. Tools of this type can help companies identify weaknesses to correct, as with benchmarking data when looking for Extended Enterprise partners, and help measure the viability of sustaining a continuous change process.
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2.0 RELATIONSHIPS TO NGM ATTRIBUTES The ability to manage change is critical to all aspects of the NGM company, and is an inherent aspect of each of the six designated NGM Attributes: Attribute #1. Customer Responsiveness The NGM Company will be able to identify and meet an individual customers needs by supplying an integrated set of products and services that meets initial requirements of function, cost, and timeliness and readily adapts these products and services in response to evolving requirements and market forces. The NGM Company will introduce revolutionary products and services that meet emerging customer needs and create new market demands at a rate that keeps it competitive in a dynamic marketplace. Attribute #2. Physical Plant and Equipment Responsiveness The NGM Company will use an ever-growing knowledge base of manufacturing science to implement reconfigurable, scaleable, and cost-effective manufacturing processes, equipment, and plants that can rapid adapt to changing needs. Attribute #3. Teaming as a Core Competency The NGM Company will team and partner, inside and outside the company, to manage an ever-changing base of knowledge and capabilities supporting development and production of products and services. Attribute #4. Human Resource Responsiveness The NGM Company will develop and maintain highly capable and motivated individuals and teams empowered to respond in a flexible work environment to customer and other stakeholder requirements. Attribute #5. Global Market Responsiveness The NGM Company will manage its manufacturing strategy to anticipate and respond to a continuously changing global market, with infrastructures tailored to regional and local cultures and business environments. Attribute #6. Responsive Practices and Culture The NGM Company will continuously evolve its core competencies, organizational structure, culture, and business practices to anticipate and respond to changing market demands. It will manage changes in its practices and culture to minimize disruption to its workforce without jeopardizing its core principles and ethics.
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3.0 BARRIERS TO IMPLEMENTATION Impediments to executing a formal change management strategy and bringing fundamental change to an organization can be grouped into eight areas: 1. 2. 3. 4. 5. 6. 7. 8. Lack of recognition of the need to continuously change Lack of a champion to sponsor the change Culture that resists change Lack of a clear vision of the future that is widely communicated Lack of training in a change process Lack of access to information regarding changes in the environment Lack of funding and/or resources to carry out the changes Lack of metrics to measure performance before, during, and after the change.
Each of these are discussed briefly in the following paragraphs. Lack of Recognition of the Need to Continuously Change Companies often do not recognize the need to make changes in their businesses. This can be due to current success and not understanding that the methods of today are becoming less relevant to tomorrows success. Additionally, it may be caused by failure to recognize new competitors from areas outside their immediate market segment. A companys way of viewing its world creates a framework for determining what types of information are considered important. Information outside this framework is generally considered of small importance or is ignored completely. These circumstances cause the company to appear not to recognize the need to change. Lack of a Champion Change in a business environment is rarely a spontaneous event yielding instant metamorphosis. It is also rare for grass-roots change to succeed without a senior management champion to clear obstacles to the change. This champion leads the change process and fights the battles encountered in implementing the desired action. In general, the higher the champion is in the organizational hierarchy, the higher the chance of success in fully deploying the change. An organizations business strategy often exists as the monolithic vision of a chief executive. In an evolving organization, documenting the vision is required to articulate the strategy in enough detail to make sense to all employees. One common barrier to communicating the strategy is the lack of a detailed model of the future structure of an organization. It is one thing for corporate leadership to demand an adaptive organization. It is another to be able to depict the desired organizational state, and yet another to be able to map the transition steps from one structure to another. In many organizations, this ability to carry the vision throughout the organization is complicated by poorly planned downsizing. For example, when companies simply erase one or two layers of management, some substitute communications model has to be created to connect the newly adjacent layers so that they can reestablish clear channels of communication and interfaces of roles and responsibilities. Culture That Resists Change The greatest hurdle to change is embedded in the corporate culture. Its not change thats so difficult and painful for us its changing. There are a variety of issues for organizations to overcome: There is often inertia to overcome, particularly in older organizations, to enable corporate recognition of the need for change. This principle can operate in either direction in an organization. The leadership can see the need to change but be hampered by a workforce threatened by the sacrifices it perceives is necessary. Conversely, corporate leaders who insulate themselves from day-to-day interaction with cus-
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tomers, operations personnel, and first-line management are the last to feel the sense of urgency that change is needed. A lack of trust inhibits the ability of members of the organization to devise and execute a plan to change. No organization will follow weak or misguided leadership for long, but management that doesnt believe in the basic competence of the companys operators and doesnt possess and model trust will never know how deeply the team can be challenged or how high it can reach. Many organizations lack the competencies to change. A workforce that has no exposure to world-class business models and change methods can hardly be expected to break out of a comfortable structure. Training key managers is not enough. Basic education and advanced knowledge of adaptive systems throughout the organization is key to successful change management. The entire workforce needs to understand the change model that the organization is going to use. Knowing the origin and the destination is not enough. If everyone knows the route, they can all pull in the right direction to arrive on time. Bureaucratic corporate decision processes often do not support growth and adaptation . As corporate structures evolve, there is a natural tendency for decisions to be made at the highest level. This creates a decision process that is cumbersome and divorced from accurate and current information. The decision support structure must permit long-term strategic decisions to be made at a corporate level, tactical decisions to be made at the point of engagement, and operational decisions to be made on the factory floor. Lack of a Clear Vision of the Future Change requires that many people, in many separate actions in their work each day, perform in a manner different than normal. These actions are rarely defined in specific detail in procedures or manuals. Therefore, the guiding force for these people is their understanding of the companys goals and objectives and the picture of the future that they carry in their mind. If a consistent, clear picture of the future state toward which the company is driving does not exist in each persons mind, the daily decisions will not help move toward the vision. Or, if the picture is inconsistent in the organization, actions will not be in concert. Lack of Knowledge/Learning in a Change Process When the employees do not understand how to implement change, or many different methods are applied to the same change initiative, the company will not succeed in implementing the desired change. This is common in companies that do not train all employees in change methodology or create an environment where the methodology is used. Lack of Access to Information, Knowledge, or Technology Technology is a much talked-about but rarely critical barrier to successfully adapting to a reinvented target organization. Most often, technology is available but not effectively used; large expenditures are made, but the results fall woefully short of expectations. The decision to overlay a business process with a particular technology is difficult to make, and costly mistakes are frequent. Intranets and Internets, along with wideband video capability, are excellent tools for rapid knowledge dissemination and reaching common understandings. Buying in to an emerging technology too early drives companies to higher acquisition costs and higher risk due to potential for changes in standards or quick obsolescence if the technology is not widely accepted. Conversely, waiting too long to abandon an aging technology subjects companies to an expensive logistics tail that comes with maintaining systems and products after the larger marketplace has passed them by. There are few decision models to help managers understand when to jump to a downstream technology. Trying to maintain a snapshot of a corporations current technological framework when technological products and processes are so fluid is very difficult. In addition, there are no reliable models that lead to any understanding of return on an investment in information technology. Also, the ability of personnel to absorb a new technology is often less than adequate, both in terms of new skill sets required and in terms of attitude or willingness to embrace the new technology. New technology usually requires significant changes to processes and to practices, a problem that is compounded by companies increasing unwillingness to pay for any specific training. This forces employees to learn on the fly and
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at their own expense, which harms morale as well as prevents the company from realizing the benefits of the technology it just bought. Lack of Commitment to Funding and/or Resources Change requires that time and resources be committed by the company. Employees and leaders must have time to consider the impacts of the change as well as the new methods, tools, and skills required. This creates a time offset between the implementation of the changes and realization of the benefits. This offset between costs and savings must be recognized and dealt with. Companies that do not address this issue effectively often do not provide sufficient commitment to the change efforts. This lack of commitment many times appears as a shortage of funding dollars, shortage of time to effectively plan and implement the change efforts, or as insufficient resources, (people, tools, equipment, systems) to successfully implement the change. Lack of Performance Metrics Change initiatives requiring significant expenditure must focus on high-leverage issues. Successful change requires that the company effectively measure results before, during and after the change. When the company does not have such metrics, change initiatives may drift, fail, or even worse be perceived as successful when they are not. Additionally, change initiatives focused in low-leverage areas must have future high potential to warrant their support. These decisions can only be made with facts and metrics. Without facts and metrics, emotional and political barriers sap the will of the company and change efforts fail.
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4.0 ENABLERS TO OVERCOME BARRIERS This section discusses alternative requirements, approaches, and methodologies to overcome barriers to effective change management in the NGM Company. The discussions are not intended to provide detailed prescriptions, but to outline concepts and techniques that can be tailored to fit the situations individual companies face in their competitive environments. The following paragraphs define actions that can be taken to minimize impact or eliminate the barriers to effective change activities. These enablers are: Leadership actions by the leaders of the companies, and the style and approach used by those leaders Infrastructures and Tools supporting mechanisms Metrics and Benchmarks measurements and comparisons Establishment of a Change Process a methodology to be used.
The discussion of each enabler includes a summary definition, a view of current state-of-the-art and best practices, a view of leading-edge pilots and state-of-the-art extensions, and future stretch goals that are key to realizing the NGM vision of this imperative. 4.1 Leadership Leadership communicates the purpose, guiding principles, and clear, concise picture of the future in a way that engages all the members of the company. This is the foundation on which actions, processes, and change initiatives are constructed to enable the company to compete in the global markets. State of the Art/Best Practice Companies whose leadership has communicated a clear vision in a fashion that energizes the entire organization to achieve the goals and objectives necessary to realize the vision represent the state of the art. The Sources section of this paper contains many references to companies that are leading examples in this area. Pilots/Emerging State-of-the-Art-Extensions Many examples have been documented of leaders of small, medium, and large companies who have established a bold vision of the future for their organization and engaged the commitment of the entire company. These articles and books are widely available, as is much material now emerging on leadership. The NGM company, however, will require that all associates of the company be capable, empowered, and willing to act as leaders every day in the performance of their work. The alignment of goals and objectives needs to enable fast decision-making at the point of action without the hierarchical reviews and approvals that encumber most businesses today. The future extension of todays exceptional companies capabilities will focus on speed of response and total elimination of bureaucratic waste with highly skilled people and enabling technology. This will require that the leadership of tomorrows winners be more like coaches than traditional control managers. Future Stretch Goals Goal: Develop and pilot risk management techniques useable across supply chains and value webs. Many are beginning to realize that the majority of companies compete for business as members of a chain of activities completed by a number of companies. These chains compete with other chains, and the one that offers the best value to the customer wins the majority of the business. Winning in this case provides for money and information to flow up and down the chain. Therefore, it is important that leaders encourage projects that facilitate learning associated with this emerging view of competition.
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4.2 Infrastructures and Network Tools Change initiatives require extensive communication in many forms to be broadly distributed across the organization. This requires infrastructures, both organizational and technology-based, to be developed within the company and extended enterprise that can be used in the change efforts. State of the Art/Best Practice Where decisions are made in an organization is often a matter of tradition, trial and error, or accident. As organizations grow, or as they face adversity, personalities often dictate moving decision steps up or down a hierarchical model. When information flows are weak or inconsistent, operational decisions are often suboptimal. An example where decision modeling is being embraced is medical diagnostics. While the volume of information on illnesses and symptoms has grown exponentially in the last few decades, a patients medical history is rarely available to a diagnosing physician. Decision support systems are being used to deliver this information to help make fast and accurate treatment decisions in medical facilities and more importantly in remote triage cases. Pilots/Emerging State-of-the-Art-Extensions Development and management of information strategies is typically ad hoc and either totally centralized or decentralized. Most companies cannot deal efficiently with the exponential increase in the volume of information or the increasing rate of change in information management technology. Many organizations are creating CIO structures in an attempt to avoid silo-ed and sub-optimal information management decisions. These structures typically place information management strategy at the highest levels in the corporation, with execution at the operational level. Future Stretch Goals Goal: Develop a change management methodology that captures the mechanism to create radical and continuous change and aligns with changes in availability and processing of data and information. To quickly make adaptive changes to the way business is performed, a company must ensure that all the associates of the business are skilled in the change process. As more associates routinely engage in change activities, it is increasingly important that the change efforts are coordinated across all of the members of the supply chain. This can only occur if the change methods have some degree of standardization. 4.3 Metrics and Benchmark Processes Change initiatives require commitment of scarce resources. To ensure these resources are focused in highleverage areas, the company must have performance metrics that focus on the vital competitive areas. The company also must have benchmark mechanisms to compare internal results with those of its competitors and others outside its industry to remain aware of the potential that may be achieved. These measurement processes must be able to effectively relate activity performance to cost and operating expense drivers (activitybased cost analysis). State of the Art/Best Practice Current modeling is often based on the shift from one stable technological structure to another. Return-oninvestment models typically do not account for the interaction between new technologies and organizational changes, and often cannot accurately account for situations in which technology changes faster than the period of analysis. Pilots/Emerging State-of-the-Art-Extensions Todays leading companies use metrics and performance measures as information to be widely shared and discussed so that everyone knows the score. This enables comparison of goals and competitors at all levels of the company. With an intense focus on process improvement, these companies are able to continually make what appear to be radical changes, but in reality are the results of lessons learned through many learning cycles achieved faster than their competition. The application of activity measures to processes provides intimate knowledge of the cost and nonconformance drivers in the process steps. Based on this knowledge, improvement activities can be specifically focused. These concepts are embodied in the precepts of activity20
based management and activity-based costing, as well as in the concepts of statistical process control and process re-engineering. Todays exceptional companies practices will be broadly used in the near future, and logical extensions of these practices predict high levels of process predictability and low cost of operations for most of todays processes as the improvement activities eliminate non-value added activities and engage improvements more rapidly. This simply elevates the table stakes of low-cost and high-quality manufacturing to unheard-of levels of responsiveness. As the use of simulation techniques matures, much of these activities will leverage sophisticated modeling tools to ensure first-time successes. Future Stretch Goals Goal: Develop effectiveness metrics that are operating during transitional periods and account for concurrent changes in technology and business processes that accompany a strategic shift to an agile corporate model. The ability to continuously improve depends on the ability to measure key parameters associated with proficiency in change. The metrics must be defined that provide feedback to an organization with respect to the effectiveness of the change process over time. These measurement criteria can then be used to track progress and to benchmark proficiency relative to competitors and across industries. 4.4 Change Process Use of a common process by all members of the company to change the way work is accomplished allows companies to make changes more quickly and effectively. The process must be individualized for the culture, style, systems, and people unique to the company. State of the Art/Best Practice There are countless models of change management that have had various levels of success. Most are based on mass production manufacturing structures and processes and often do not capture the notions of radical and continuous change, life-cycle product/service support, or changes in information management over the last several years. The creation of agile organizations is evolving on two levels. Some are developed new, like The Custom Shoe shoe stores, and some are evolving in existing organizations. In either case, the change process is dramatic rather than incremental, a subtle difference that needs to be modeled in a change process leading to the NGM level. Pilots/Emerging State-of-the-Art-Extensions There are countless models of both current and target organizational structures. A common weakness in the tactics of organizational change is dealing with change as the chaotic period in the middle the transitional state between more stable periods. Most organizations view transitional periods as something to survive. Often, sub-optimal decisions are made simply with a view of getting through the transition. The Agility Forum is studying change management in the context of the agile company. Tools have been developed that evaluate change proficiency based on four defined agile metrics: Time, Cost, Robustness, and Scope; and the following change domains: Creation/Deletion (Build/Remove Complete Capability) Expansion/Contraction (Add/Subtract Same Capability) Addition/Subtraction (Add/Subtract Different Capability) Reconfiguration (Change the Relationships) Migration (Fundamental, Event-Based) Variation (Performance Time Operation Surprise) Augmentation (Incremental, Continuous Improvement) Correction (Recovery, Return to Service).
Emerging work seeks to further improve the tools by breaking down application to specific critical business practices such as: Strategic Planning Innovation Management
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Business Case Justification Knowledge Management Organizational Relationships Performance Metrics.
Evaluations can be mapped to a Change Proficiency Profile and used to make strategic decisions on where to concentrate efforts. The tools are also useful to identify the existence or degree of capability. Future Stretch Goals Goal: Develop a change management methodology that moves an organization through continuous change and renewal, with brief stops for assessment rather than quickly transitioning from one steady state to another. The methodologies must facilitate continuous change rather than the pursuit of stability that most of todays methodologies foster. In addition, these methodologies need to enable alignment across all business processes rather than focus on single process improvement initiatives.
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5.0 FRAMEWORK FOR ACTION The following discussion offers three steps that a company can take to put in place the capabilities for success in the competitive environment of the 21st Century. The recommendations are a framework for action in general terms; each company will need to create specific actions appropriate for its organizational climate, cultural readiness, and competitive environment. 1. Implement a Change Process It is no longer sufficient to simply focus on incremental improvements aimed at perfecting execution of todays processes. A change process must be developed, and all associates of a company must be educated in the techniques. All individuals need to become skilled in applying the change process to all aspects of the company. The change process must include all six steps identified in Section 1.1.4 and 1.3.6, and must be clearly linked to the goals and objectives of the company in a fashion that allows all associates to have a clear line of sight as to how their day-to-day change activities impact these goals. 2. Actively Choose a Position on the Change Continuum Any company that simply reacts to outside influences to position itself on the change continuum identified in Section 1.1.2 will soon find itself going out of business. A company must proactively decide where on the continuum it needs to be positioned in future years. Once a target position has been identified, specific actions must be implemented to shift the companys position from todays point on the continuum to that point desired. The success of the repositioning must be continuously monitored and adjustments made to the activity plan as new information becomes available. The target itself must be continuously reassessed for appropriateness as the competitive environment evolves. 3. Use Frame-Breaking Appropriately (Get Outside the Box) The company must be prepared to use radical new ways of processing in all facets of the business. All activities must be continuously evaluated for value-add and ability to create value as perceived by the customer. Techniques to think out of the box must be included in this change process. All associates need to be skilled in these techniques, and the leaders of the company must create vivid pictures of the future of the organization so that these techniques can be targeted to help that vision become reality. Individual companies are not alone in the need to embrace next-generation change processes. Figure 5.0-1 identifies supporting actions that government, academia, individuals and industry as a while can take to support the development of change management and change processes as integral tools for success at the personal, organizational, and national levels. Table 5.0-1. Summary Action Framework
Sector
Industry
Near-Term
Develop/use transitional best practice models & effectiveness metrics Develop NGM agile supply web modeling
Mid-Term
Create knowledge & change models Pilot decision support models Develop Agile supply webs Adapt regulatory environment to foster fast change Develop curricula that prepare next-generation leaders to lead continuous change Recognize change as inherent to success & rewards
Far-Term
Support development of rapid change capabilities in all manufacturing sectors Ensure U.S. infrastructure attracts global businesses to produce here Ensure standards of education continue to exceed world trends Promote closer collaboration by industry, government, & academia to facilitate global leadership Recognize lifelong continuous learning as the way of being
Government
Academia
Develop decision support & effectiveness models Adopt & use change capability assessment tools
Individuals
Note: Most actions require participation from multiple groups listed on the left side of the table.
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6.0 SOURCES
1. 2. 3. 4. 5. 6. 7. 8. 9. Barnes, Tony, Kaizen Strategies for Successful Leadership, How to Take Your Organization Into the Future, Pitman Publishing, London, 1996. Beckhard, Richard, Reuben T. Harris, Organizational Transitions, Managing Complex Change, Addison-Wesley Publishing Company, Reading, MA, 1987. Bridges, William, Managing Transitions, Making the Most of Change, Addison-Wesley Publishing Company, Reading, MA, 1991. Carr, David K., Kevin J. Hard, and William J. Trahant, Managing the Change Process: A Field Book for Change Agents, Consultants, Team Leaders, and Reengineering Managers, McGraw-Hill, New York, 1996. Connor, Patrick E., and Linda K. Lake, Managing Organizational Change, Praeger Publishers, New York, 1988. Dove, Rick, Tools for Analyzing and Constructing Agile Capabilities, Perspectives on Agility Series, Agility Forum, Bethlehem, PA, 1996. Eales-White, Rupert, Creating Growth From Change, How You React, Develop and Grow, McGraw-Hill Book Company, London, 1994. Eccles, Tony, Succeeding With Change, Implementing Action-Driven Strategies, McGraw-Hill Book Company, London, 1994. Flannery, Thomas P., David A.. Hofrichter, and Paul E. Platten of the Hay Group, People, Performance & Pay, The Free Press, New York, 1996.
10. Fombrun, Charles J., Leading Corporate Change, How the Worlds Foremost Companies Are Launching Revolutionary Change, McGraw-Hill, Inc., New York, 1992. 11. Galpin, Timothy J., The Human Side of Change, A Practical Guide to Organization Redesign, Jossey-Bass Publishers, San Francisco, 1996. 12. Gouillart, Francis J., and James N. Kelly, Transforming the Organization; Reframing Corporate Direction, Restructuring the Company, Revitalizing the Enterprise, Renewing People, McGraw-Hill, Inc., New York, 1995. 13. Hackman, J. Richard, and Greg R Oldham, Work Redesign, Addison-Wesley Publishing Company, Reading, MA, 1980. 14. Kissler, Gary D., The Change Riders, Managing the Power of Change, Addison-Wesley Publishing Company, Inc., Reading, MA, 1991. 15. Kotter, John P., A Force for Change, How Leadership Differs From Management, The Free Press, New York, 1990. 16. Kotter, John P., Leading Change, Harvard Business School Press, Cambridge, MA, 1996. 17. Merron, Keith, Riding the Wave, Designing Your Organizations Architecture for Enduring Success, Van Nostrand Reinhold, New York, 1995. 18. Morton, Michael S. Scott (ed.), The Corporation of the 1990s, Information Technology and Organizational Transformations, Oxford University Press, New York, 1991 19. Price Waterhouse Change Integration Team, Better Change, Best Practices for Transforming Your Organization, Irwin Professional Publishing, Burr Ridge, IL, 1995. 20. Robbins, Stephen P., Essentials of Organizational Behavior (4th Edition), Prentice Hall, Englewood Cliffs, NJ, 1994. 21. Smith, Douglas K., Taking Charge of Change, 10 Principles for Managing People and Performance, Addison-Wesley Publishing Company, Reading, MA, 1996. 22. Want Jerome H., Managing Radical Change, Beyond Survival in the New Business Age, OMNEO, Essex Junction, VT, 1995.
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January 1997
Prepared By: The NGM Business Practices Thrust Team
CONTRIBUTORS Marc Field, Agility Forum, Lead Author Jim Bronson, HJB Associates Howard Esslinger, Texas Instruments Barbara Fossum, IC2 Institute, University of Texas at Austin and Reveille Technology, Inc. Gary Hurst, Texas Instruments Don Liles, Automation & Robotics Research Institute, University of Texas at Arlington Debra M. Amidon, Entovation International Ed Morris, Lockheed Martin Vought Systems Jim Peoples, Lockheed Martin and DSM Engineering Plastic Products Kenneth Preiss, Agility Forum and Ben Gurion University of the Negev, Israel Trent Shute, Rhne-Poulenc Gary Thompson, Rockwell Collins Scott Thurber, Air Products and Chemicals
ii
iii
The NGM Framework

Global Drivers
iv

People
The NGM Company

vi

H L M H H H H M L M
H H H H H M L M M H
H L H H H M H H H H
H H H H H M M M H H

* H M M H M M H H H
H * M M
M M * H H
H H M * H
H M M H *
M M H H H
M M H M
H H
H H H
H H H
M - Medium Impact
vii
H H H M
Impact On
Change Management

H M M H H M L M H H
Global Drivers
viii

Investment/Finance
Technology
X X X X
X X X X X
X X
X X
X X X X X
X X X X X X X X X X
X X X X X
X X X X
X X X
X X X X X X
X X X X X X
ix
Knowledge Supply
Product Life Cycle
Human Resources
Sourcing/Teaming
Environmental
Innovation
CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 Imperative Definition ............................................................................................................................. 2 1.1 Definition of Terms.......................................................................................................................... 3 1.2 Types of Innovation.......................................................................................................................... 5 2.0 Relationship to NGM Attributes ........................................................................................................... 6 3.0 Barriers to Implementation .................................................................................................................... 7 3.1 Organizational Culture and Structure ............................................................................................... 7 3.2 Resistance to Change ........................................................................................................................ 7 3.3 Performance Metrics......................................................................................................................... 8 3.4 Reduced/Mismanaged Investment .................................................................................................... 8 3.5 Improper/Inadequate Teaming ......................................................................................................... 9 4.0 Enablers to Overcome Barriers ............................................................................................................. 10 4.1 Enablers Defined ............................................................................................................................ 10 4.1.2 Culture................................................................................................................................ 10 4.1.3 Management ....................................................................................................................... 11 4.1.4 Information Technology ..................................................................................................... 11 4.1.5 Innovation in an Extended Enterprise ................................................................................. 12 4.1.6 Research & Development and Sources of Innovation .......................................................... 13 4.1.7 Innovation Assessment Tools, Metrics, and Methodologies ................................................. 13 4.2 State of the Art/Best Practice........................................................................................................... 14 4.2.1 The American Productivity and Quality Center .................................................................. 14 4.2.2 Business Intelligence Knowledge Management-in-Practice Study ........................................ 14 4.2.3 Communities of Practice (CoP)........................................................................................... 15 4.2.4 Stage Gate Model................................................................................................................ 16 4.2.5 Other Collaborative Efforts ................................................................................................. 16 4.2.6 Some Specific Examples ...................................................................................................... 16 4.3 Pilots/Emerging State-of-the-Art Extensions ................................................................................... 17 5.0 Action Plan Recommendations ............................................................................................................ 20 5.1 Action Recommendations for Companies....................................................................................... 20 5.2 Action Recommendations for Industry and the Nation................................................................... 22 6.0 Sources ................................................................................................................................................. 23
ACRONYMS & ABBREVIATIONS APQC CEO CoP CSIS DoD EDS IT KMAT NGM NIST NSF OECD R&D SEC TRIZ UK WWW American Productivity and Quality Center chief executive officer community of practice Center for Strategic & International Studies U.S. Department of Defense Electronic Data Systems information technology Knowledge Management Assessment Tool Next-Generation Manufacturing National Institute of Standards and Technology National Science Foundation Organization for Economic Cooperation and Development research and development Securities and Exchange Commission Theory of Inventive Problem Solving United Kingdom World Wide Web
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EXECUTIVE SUMMARY Innovation is the creative process of improving everything from business practices to the technology used to develop and deliver products and services to the development of the products and services themselves. Modern innovators have gone from creating products to creating solutions. Innovative solutions then become platforms for future innovations. Innovation tends to flourish where fundamental constraints are lifted and/or where a sense of urgency is present. For a company to position itself competitively in the Next-Generation Manufacturing (NGM) environment, it is essential that everyone in that company be involved in modern innovation strategies and practices. Why is it Important? As the level of competition becomes more intense due to accelerating change in the global business environment, the ability to stay ahead of the wave is increasingly important. The NGM company must quickly generate solutions through use of evolving innovation techniques. Key Concepts Changes initiated to make people more motivated at work also serve to increase the level of innovation. People are the most critical element in the innovation process. NGM companies must create an organizational structure, culture, and measurement and reward systems that encourage innovation. This includes placing value on risk-taking and learning from failure in the creative process of innovation. Whats New? Innovative behavior can be taught and learned. Companies that apply a systematic approach and rapidly make use of emerging technologies dominate their markets. These companies maintain their competitive position by fostering an innovation-driven culture. Evolving information technology brings new opportunities to light through innovative knowledge management. Companies that understand the value of long-term effects of good innovation policy restructure their processes to facilitate strategic changes. Action Recommendations 1. Individual companies can develop a process to promote and reward innovation throughout all the operations of the business. They can require innovation as a prerequisite for management positions and form or join consortia to develop mechanisms for stimulating innovation in all facets of enterprise operations market development, product development, process engineering, manufacturing, supply chain management, customer service, etc. 2. Industry and academic associations and consortia can embrace forward-looking, cross-cutting programs like NGM as a way to institutionalize innovation in approaching problems that are beyond the ability of any one organization to solve.
1.0 IMPERATIVE DEFINITION NGM companies must develop and maintain an environment that promotes, fosters, and rewards creativity and innovation. Success in the next generation requires a progressive innovation strategy that moves from being an art, as it is currently, to being a systematic discipline. Achieving this will permit companies to recreate innovation as a sustainable process, not dependent only on the creativity and determination of individuals who come and go. Innovation then would become a process on which company executives could rely and use to make rational investment decisions. Every organization not just businesses needs one core competence: innovation. And every organization needs a way to record and appraise its innovative performance.1 Companies are beginning to realize that ideas can come from anyone in the organization. However, there are problems that stand in the way of benefiting from these ideas because of a lack of vision, policy, practice, process, and management commitment to innovation: Most employees do not know that their ideas are welcome and needed. Management does not know how to manage the flow of ideas. Ideas that do get through to management are seldom implemented. Businesses of today have many challenges to face, including:2 Accelerating rates of change Increasing levels of competition Globalization of business competition Rapid technological change A more diverse workforce Resource shortages The transition from an industrial to a knowledge-based society Unstable market and economic conditions Increasing demands of constituents Increasing complexity of the business environment.
Through these challenges, innovation emerges as the key competency that must be managed to lead companies into the next generation. In this new environment, companies must make strategic decisions as to where to place themselves on the Continuum of Enterprise Approach to Change and Innovation. 3 (Figure 1.0-1).
Continuum of Enterprise Approach to Change & Innovation
Dinosaur
Chooses to Compete in Places Less Affected by Change
Catch-Up
Always in a Catch-Up Mode
Laggard
Usually Lags Leaders
Imitator
Copy, Quick Imitator
Adopter
Adopts New Ideas Readily to Improve
Creator
Continuously Creates New Ideas & Leading-Edge Practices; Agile
Inactive
Reactive
Proactive
Figure 1.0-1. Continuum of Enterprise Approach to Change and Innovation
1 2
Drucker, Peter F., The Information Executives Truly Need, Harvard Business Review, January-February 1995. Higgins, James M., Innovate or Evaporate: Test and Improve Your Organizations IQ Its Innovation Quotient, The New Management Publishing Company, 1995, pp. 5-8. 3 Adapted from meeting notes of the Business Practices Thrust Team of the Next-Generation Manufacturing Project, 25 June 1996.
The double line between Laggard and Imitator indicates a critical point in ability. In most cases, it is not advisable to maintain a strategic position to the left of the double line, which leaves the company always surprised by a competitive threat. In a global and dynamic environment, companies that lag or do worse will be overwhelmed by those that quickly imitate or do better. While it is possible to allow certain processes to drift to the left, the company system must stay and continue to push further to the right. In any case, proactivity will no longer be a stretch goal that makes for interesting content in case studies. It will indicate a companys ability to innovate and will be the one true factor by which the company can be judged by all stakeholders. As a result of the rapid acceleration of the industrial product cycle, the dynamics of global competition, and the short-term requirements under which companies operate for demonstrating shareholder value and return of investment, the ability of companies to innovate (and reap the attendant financial rewards and market share) is critically dependent on their ability to effectively exploit strategic enabling technologies.4 In an environment characterized by complexity, uncertain market conditions, and convergence of technologies/industries, the need for a holistic, systems-level perspective is more apparent. As companies progress toward more advanced management practices, increased technology/business integration is essential. More effort will be applied to integrating the economic, behavioral, and technological factors of management. There will be a natural evolution toward building customer interaction and harnessing the intellectual capabilities of a company, both of which facilitate innovation. 1.1 Definition of Terms As part of the research for this paper, several resources were perused for relevant definitions. It appears that there are two schools of thought relative to the innovation process. The first is that invention and innovation are separate but interdependent processes. An invention is created and then innovation takes over, transferring the results into production to reap commercial benefits. The second perspective is a systems view in that invention is the first and integral stage of the total process of innovation. Although there is contextual and semantic diversity in the definitions, it is wise for a company to define the terms and the way they are used consistent with their own organizational strategy. The following three definitions form the basis for a strategic understanding of the topic of innovation. A company that has solid understanding of the three and can link them together through practice will be more prepared to succeed in the next generation. What Is Invention? Essentially, invention is the creation of something new. The purpose for this creation may not yet be defined. Some invention is done out of necessity, some out of chance. Again, there are two ways to perceive an invention. The first view is from the perspective of patents, prototypes, and discrete deliverables: Engineers say that a new idea has been invented when it is proven to work in the laboratory. [In this regard], the idea becomes an innovation only when it can be replicated on a meaningful scale at practical costs.5 The second view is more generic and includes the notion of idea creation, which may lead to new or improved products and services: Information gathered from new connections; from insights gained by journeys into other disciplines or places; from active collegial networks and fluid, open boundaries...arises from ongoing circles of exchange, where information is not just accumulated or stored, but created.6
4
Brown, Harold, Herzfeld, Charles, and van Opstal, Debra, Global Innovation/National Competitiveness: A Report of the CSIS Senior Policy Group an National Challenges and the Senior Action Group on R&D Investment Strategy, The Center for Strategic & International Studies, 1996, p. 70. 5 Senge, Peter, The Fifth Discipline, 1990. 6 Wheatly, Margaret, Leadership and the New Science, Berett-Koehler Publishers, 1992.
What Is Innovation? Over the past decade, increased attention has focused on the process of innovation that it is systemic in nature and must be managed as a business process. Most companies are not lacking in ideas, but in how to quickly translate those ideas into viable products and services. This is a management process that must be optimized and not left to chance. Innovation is a process, not a product. For example, the innovation of xerography was more than Chester Carlson tinkering for a decade in his basement. Success took design refinement, capital, distribution, service, and charging by the copy rather than selling machines...A monumental innovation such as the automobile is a social movement as much as a machine. 7 The first generalization is innovation = invention + exploitation. The invention process covers all efforts aimed at creating new ideas and getting them to work. The exploitation process includes all stages of commercial development, application, and transfer, including the focusing of ideas or inventions toward specific objectives, evaluating those objectives, downstream transfer of research and/or development results, and the eventual broad-based utilization, dissemination, and diffusion of the technology-based outcomes. Invention is marked by discovery or a state of new existence, usually at the lab or bench. Innovation is marked by first use, in manufacturing or in a market...technological innovation is a multistage process, with significant variations in the primary task as well as in the managerial issues and effective management practice occurring among these stages...innovation occurs through technical efforts carried out within an internal organizational context, but involving heavy interaction with the external technological as well as market environment.8 What Is Technology? For years, technology was viewed explicitly in terms of a tangible material transformed through some production process into goods for sale. Due to recent insights on the dynamics of the innovation process, researchers and practitioners are beginning to broaden the definition to include the concepts of learning, knowledge application, management systems, and the increasing role of services in the process. Technology is a specialized body of knowledge that can be applied to achieve a mission or purpose. The knowledge can be in the form of methods, processes, techniques, tools, machines, materials, or procedures. Technology can therefore be defined as the means by which knowledge is applied to produce goods and services.9 The technology of a society represents the composite usable knowledge that the society applies and directs toward the attainment of cultural and economic objectives. In essence, technology is how things are accomplished. Different societies will use different methods, varying in degree of methodological sophistication to reach goals...Technology is a product of invention and innovation.10 Technology is often taken for granted in todays society. Few people stop to think, nor can they imagine, how individual products or systems were created and what makes them work. From paper clips to space shuttles, technology plays an ever-more important role. Despite the variance of definitions discussed above, the critical element in the birth, use, and disposal of technology is people. Through an intricate structure of technical and managerial knowledge, skills, and creativity, raw masses are converted into working systems. Technology exists in the mind as well as the physical world because of its ability to build on itself and perpetually produce new things.
Hall, Robert, The Soul of the Enterprise: Creating a Dynamic Vision for American Manufacturing , HarperCollins Publishers, Inc., 1993, p.172. 8 Roberts, Edward B., ed., Generating Technological Innovation, Oxford University Press, 1987, pp. 3-4. 9 Edosomwan, Johnson A., Integrating Innovation and Technology Management, John Wiley & Sons, Inc., 1989, p. 10. 10 Roman, Daniel D. and Puett, Joseph F., Jr., International Business and Technological Innovation, Elsevier Science Publishing Co., Inc., 1983, pp. 3-4.
1.2 Types of Innovation A scientific invention may be viewed as a new idea or concept generated by R&D, but this invention only becomes an innovation when it is transformed into a socially usable product. Lay persons, probably because of the mystique which surrounds science, generally view invention as a relatively rare event, and assume that once it has occurred, the process of innovation can be completed in a straightforward manner. In actuality, the converse situation obtains.11 The above quote helps to put the definitions of invention and innovation in perspective. Though it specifically mentions scientific invention, companies need to realize that the same principles should be applied to all types of invention. Four types of innovation12 have been documented by several authors: 1. Management Innovation is intended to improve or create a better organizational environment. In turn, strategies laid out by management have a direct impact on the other three types of innovation. 2. Process Innovation is intended to improve or create specific processes within an organization. This includes both manufacturing and business processes. 3. Product Innovation is intended to improve or create the actual item or service provided to the customer. 4. Marketing Innovation is intended to improve or create the means by which the organization and customer communicate and exchange goods. This simple definition belies the fact that marketing innovation increasingly has rippling effects throughout the value chain. Process innovation, originally meant to imply the creation of new and improved processes to deliver specific products and services, has evolved. Now, process covers all aspects of the business environment. Forwardthinking companies are trying to develop strategies and models to guide them to a state where innovation is the norm, not the exception. It is through an innovative process that innovative products and services will emerge. Rare is the company that is able to maintain a platform for innovation and proactively drive rapid changes in their industries. While there are different types of innovation, they all require the same basic elements. This leads to the point that while innovators may seem to focus on one type in particular, successful results usually involve open consideration of all. The purpose of identifying types is to allow employees to see how innovative practice applies to them and the process in which they work. Once the fundamentals of innovation are understood, the lines dividing the types become blurred.
11 12
Martin, Michael J.C., Managing Innovation and Entrepreneurship in Technology-Based Firms, John Wiley & Sons, Inc., 1994, p. 4. Higgins, James M., Innovate or Evaporate: Test and Improve Your Organizations IQ Its Innovation Quotient, The New Management Publishing Company, 1995, p. 17.
2.0 RELATIONSHIP TO NGM ATTRIBUTES As previously discussed, effective, responsive innovation management capabilities underpin all facets of NGM enterprise operation. Table 2.0-1 summarizes the relationship of the Innovation Management imperative to each of the enterprise attributes identified as intrinsic to true NGM companies. Table 2.0-1. Relationship Between Innovation Management and NGM Attributes
NGM Attribute Customer Responsiveness Physical Plant & Equipment Responsiveness Teaming as a Core Competency Human Resource Responsiveness Weight of Relationship High Explanation Partner-like links between the enterprise, customer, and supplier provide a foundation for collectively envisioning and delivering future products and services. Attention to the work environment has uncovered insights on the relationship between innovation and culture changes. Optimal real-time learning strategies become actions that create and use technology to achieve business results. Innovation, by definition, requires effective partnering and collaboration across organizational boundaries. Such networked teams can better leverage distinctive competencies to benefit the overall project/mission. An innovative company recognizes the value of creativity and responsible risk-taking and provides appropriate incentives/rewards. How an employee creates, shares, and applies knowledge is a key indicator of how innovative a company can be. Increasingly, the exploitation variable of the innovation equation depends heavily on strategies to make use of global resources and plans for global marketing/distribution. Best practices are rapidly being documented and disseminated to wide audiences. The leaders are learners, rapidly adapting new methods and techniques into strategies to capitalize on unexpected business opportunities. Entrepreneurial companies must determine how to manage forward momentum to maximize responsiveness.
High
High
High
Global Market Responsiveness Responsive Practices & Culture
High
High
3.0 BARRIERS TO IMPLEMENTATION This section identifies current barriers to implementing innovation. All benefits aside, the negative impacts of the aggressive corporate quality reengineering and restructuring efforts of the 1990s have resulted in corporate cultures that cannot produce the values needed in a dynamic, highly competitive global economy. Many companies are suffering corporate anorexia as a result of downsizing and restructuring actions and may now be too lean to innovate.13 Each company is unique and each company and industry responds to barriers differently. However, in developing an innovation strategy, executives should assess which barriers apply to their business in order to plan and execute appropriate responses. 3.1 Organizational Culture and Structure The restrictive nature of most company cultures has a negative impact on its potential for innovation. For many people, creativity is fostered when they are given open access to company resources and when they are appreciated for the value of their creative contributions. Organizations that put too much emphasis on the way things are done here often meet with employee resistance, which ultimately results in the way things are not done here. Employees have many concerns, and for the most part these are reactions to the organizational values, beliefs, and norms within which they work. Here are just a few: Getting the job done right with pride Fear and consequences of failing Backlash from speaking out Downsizing effects Political correctness Technical competence (keeping up) Personal issues.
Most company cultures do not support the individual. Employees are either treated as or feel like generic resources. The traditional, hierarchical infrastructures of the past primarily promoted command-and-control management systems. Although this fosters a sense of accountability and logic to the decision-making process, such rigidity is not conducive to todays work environment. Employees unfortunately become more concerned with doing things the right way than with doing the right things. A successful enterprise requires customized application of both. In hierarchical systems, employees historically are not valued for the real contribution they can make to the enterprise. They are recorded as liabilities rather than investments on the balance sheet. This can have an adverse effect as employees return this valuation in the form of reduced company loyalty. Organizational structure can be a major barrier to improving corporate culture. Even as more companies attempt to become flatter, employees still think in the old hierarchical paradigm. Empowerment cannot truly work if it is obstructed. This problem is magnified in larger companies where even improved structure does not keep employees from feeling lost in the system. Ultimately this can result in fragmentation and competition for internal resources rather than strategies for a collective vision and common goals. 3.2 Resistance to Change Innovation is in fact proactive change . Choosing to innovate may mean rocking the boat. Status quo mentality must be overcome by sustained management reinforcement of the need to innovate. Resistance to change is a natural position for most people. Most often, this resistance occurs at the operational and process levels and can be a company-wide cultural issue. Even if strategic decisions are made to keep certain processes stagnant, NGM companies will need to be innovative more often than not.
13
Wysocki Jr., Bernard, The Outlook: Big Corporate Layoffs Are Slowing Down, The Wall Street Journal, 12 June 1995, p.1.
There may be a direct correlation between the lack of access to new resources and the ability to be open to new ideas. Those who are not able to follow through with ideas or who have lost faith that their ideas will be implemented are unlikely to generate or share new ideas. In that environment, employees may choose to hoard knowledge that allows them to keep it portable in the event of a job change. 3.3 Performance Metrics Individuals tend to perform based on the method by which they are measured. Even though tools to gauge the innovative capabilities of companies have only recently become usable, most of the companies have yet to reward or encourage innovative behavior. In fact, because failures are often a necessary element of creativity, employees are implicitly discouraged from suggesting or developing new ideas. This is true because failure traditionally results in punishment or revocation of reward. Leading economists have now identified the difference between book value and market value; it may be mostly due to the intangible assets of a company (i.e., the non-financial data) not reported on the balance sheet. In other words, companies tend to use traditional accounting metrics, which may in effect be the wrong indicators of success. A modern view of performance has captured the imagination of The Canadian Institute for Certified Public Accountants, The World Bank, The Brookings Institute, the Securities and Exchange Commission (SEC), and the Organization for Economic Cooperation and Development (OECD). The practice is, however, very new and will take years to mature. 3.4 Reduced/Mismanaged Investment This paper shows that innovation takes place both in and out of the R&D effort of a company. However, regardless of the source of innovative and creative planning, funds allocated to R&D are still a good indicator of commitment. Figure 3.4-1 shows that funding for R&D has been decelerating, or in some cases leveling off, since the late 1980s.
180 160 U.S R&D By Sector ($B) 140 120 100 80 60 40 20 0 1960 65 70 75 80 85 90 Federal Government Universities & Colleges Nonprofits 1995 Industry U.S. Total
Source: National Science Board, Science & Engineering Indicators 1996
Figure 3.4-1. Sources of Funds for R&D by Sector (1953-1995) The top 100 companies had increased their aggregate R&D investment by 15.3%...The rise was sharply higher than the 3.1% and 3.2% increases in the previous two years, and confirms our R&D trends forecast for stronger growth. We are seeing not only more short-term R&D investment, as a result of strong profits and cash flows in the past three years, but also more higher risk, longer range work. It is too early to declare that the four-to-five year recession for industrial R&D is over, but these data indicate that the end may indeed be in sight.14
14
Larsen, Chuck, Annual Report of the Industrial Research Institute, 1996.
The question remains, however, exactly how those research funds are being applied. There is increasing pressure from industry to fund projects that are farther downstream in the value chain than most academic researchers would like. The decline in defense spending and the increase in global and domestic competition have pushed companies to move R&D dollars from high-risk, medium-term research to nearer-to-market product development. 15 Demands for these deliverables may jeopardize the value basic research has given the U.S. in the past. On the other hand, if research results become readily available around the world at the click of a computer keystroke, the need for the management ability to quickly convert those ideas into products and services becomes paramount. Most companies are not organized to capitalize on such opportunities. 3.5 Improper/Inadequate Teaming Teaming has become a key enabler throughout industry. However, some of its application can actually inhibit innovative progress. Teams are formed of individuals who together can better complete a particular task. Inefficiencies arise when there is too much focus on consensus and not enough push on getting the job done correctly and quickly. As technical knowledge in different specialty areas diffuses throughout the organization, the workplace becomes populated with specialists at cross-functional work rather than with technical specialists. 16 Crossfunctionality works best when team members are specialists in at least one discipline. While soft-side skilled individuals do sometimes provide enormous value, only hard-side skilled specialists can create the opportunities. In other words, companies, educational institutions, and the government must not forget to encourage pursuit of the hard-side technical disciplines while at the same time facilitating soft-side cultural development. Variables in the co-opetition dynamic, where companies both cooperate and compete with one another, are17: Independent members Multiple leaders Unifying purpose Voluntary links Interactive levels.
Few companies are equipped to manage the complexity resulting from these self-organizing systems. It is difficult to manage such dimensions of interaction when companies are experiencing the economic trauma of our time. Creativity is not a trait, like intelligence, and therefore, most people can develop creative skills with proper training and motivation.18 As training issues are studied in both a functional and psychological sense, it becomes apparent that innovative behavioral patterns are often cut off. People are not encouraged to think creatively nor are they taught about successful creative processes. There are some companies that have established Offices of Innovation to monitor the process and provide seminars, courses, and promotional materials to inspire creativity but they are the exception, not the norm. In addition, corporate directors of education, training, and development have begun to comprehend the implications of the shift from traditional classroom (i.e., teacher-centered) education to real-time learning (i.e., student-centered). This requires major restructuring of resources and may depend on the sophistication of the computer/communications infrastructure of the company.
15
Building the American Dream: Jobs, Innovation, and Growth in Americas Next Century, U.S. Department of Commerce, August 1996, p. v. 16 Thurlings, Bert and Debeckere, Koenraad, Trends in Managing Industrial Innovation First Insights from a Field Survey, Research-Technology Management, July-August 1996, p.14. 17 Lipnack, Jessica and Stamps, Jeffrey, The TeamNet Factor: Bringing the Power of Boundary Crossing to the Heart of Your Organization, Oliver Wight Publications, 1993, pp. 29-52. 18 Gomez, Mario P., Creativity in Engineering Design, based on a lecture given at Washington University, 23 March 1995.
4.0 ENABLERS TO OVERCOME BARRIERS Successful and constant innovation relies on a system designed to capitalize on the insight and imagination of every individual worker and how they contribute to the whole. Each enabler outlined below provides employees with the necessary environmental conditions to facilitate innovation. The successful NGM enterprise depends on the motivation of all contributors and the synergy of their interactions. For example, progressive companies are beginning to focus on the quality of conversations as one way of accelerating innovation capacity. Essentially, the reason why many people arent particularly innovative with regard to a given endeavor is because they have achieved a level of competency in doing something the way they do it. Practice doesnt necessarily make perfect; it does make things regular and predictable. 19 These enablers for innovation demonstrate that companies can shake things up strategically to produce a desired set of outcomes. That is to say that these seemingly radical changes can be controlled through good management of the workforce, technology, and extended enterprise. While each enabler has its own emerging state-of-the-art and stretch goals, it is important to remember that innovations, particularly those in business practices, have many different applications. Businesses need to realize that sources of learning and opportunity come from many places. Extending the view out of the box requires attention to other industries and cultural developments. Information technology, in particular, is building bridges between industries and showing how lessons and solutions can be shared. 4.1 Enablers Defined 4.1.2 Culture Innovation is clearly affected by the culture within a company or project. Creativity relies on the freedom to think of and express new ideas. Innovation depends on individual understanding of the entire system, from creation through commercialization. If the innovation process is made explicit and defined as a corporate value, chances for successful implementation are improved. To innovate means to break away from established patterns. Thus the innovative company cannot rely on any form of standardization for coordination. It must avoid all the trappings of bureaucratic structure: sharp divisions of labor, extensive unit differentiation, highly formalized behavior, or an emphasis on planning and control systems. Above all, it must remain flexible...Sophisticated innovation requires a very different configuration, one that is able to fuse experts drawn from different disciplines into smoothly functioning ad hoc teams...These became the original adhocracies of our society.20 McKinsey & Co. estimates that 80 percent of all jobs in the United States in the year 2000 will require knowledge skills rather than manual skills, and 50 percent of the knowledge jobs will require the equivalent of a college degree.21 If the main source of innovation is eventually derived from the organization of human knowledge, fundamentally new training and operating models must be developed. Internal and external teaming greatly facilitate innovation. By bringing together individuals and resources, teams are more likely to succeed in the exploitation part of the innovation equation.
19 20
On Innovation, Production , November 1995, p. 62. Mintzberg, Henry, Mintzberg on Management: Inside Our Strange World of Organizations, Free Press, 1989. 21 Handy, Charles, The Age of Unreason , Harvard Business School Press, 1990.
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4.1.3 Management To maintain a successful innovation process, it must be led and supported by management. However, management in this new sense refers to innovation leaders as opposed to command-and-control officers. This new breed of managers should understand all of the innovation enablers and constantly seek to create more. They must drive innovative practice and adjust to innovative activity going on at all levels of the company. Innovation leaders can be found in all functions of the company, from finance through services. Each profession is wrestling with the same challenge how best to integrate the economic, behavioral, and technological factors of the company. One thing is constant; however: the leadership must be collaborative and bring in the diverse competencies of functions throughout the company. While varying strategies of workforce structure are continuously redesigned, management needs to recognize that a realized innovative culture carries more importance. 3M has always realized that by creating an environment where invention and innovation are encouraged, it could better take advantage of its own knowledge base. An innovative environment depends on the nature of creativity, experimentation, and discovery. This means that mistakes are not necessarily condoned but at least treated as a learning experience. Responsible risktaking should be encouraged and continually reaffirmed. Innovation is held back as a result of policies and procedures that punish out-of-the-box thinking. Only management can take the fear out of presenting what may appear initially as half-baked or unconventional ideas. Corporate reengineering efforts also seem to conflict with innovations dependency on the knowledge base. Even if organized well, innovation requires a non-measurable sense of freedom from rigid self- or management-imposed structures. The new model must take into account and attempt to roughly quantify soft-side enablers such as behavior, workplace environment, and creative generation. Clear and innovation-supporting process and performance metrics set by management can be the most important catalyst toward becoming an innovative company. Often penalized for failure, employees are actually discouraged to innovate. Managers measured on productivity, sales, and efficiency are not likely to take on risks and make the investments needed to create the next wave of opportunity and prosperity. 4.1.4 Information Technology There is broad agreement that the NGM enterprise will rely on a new level of information access. A key tenet will be the right information, to the right place, at the right time, and in the right format. This enhanced information technology (IT) environment will facilitate the innovation process. Instead of applying accounting functions to a specific product or service, IT resources can affect the process through which products and services are delivered. As process innovation is used more to create an environment that produces future innovations, IT resources are now required to be flexible, reconfigurable, and reusable so that benefits can be gained, not necessarily for longer periods of time, but surely by different operating functions of the company or enterprise. Lack of these characteristics is currently a great weakness of IT systems. More specifically, IT can enable innovations most critical success factor: speed. In other words, companies should view the technology as supporting the infrastructure for the flow of ideas and rapid learning, not just as an information superhighway. Some progressive companies have evolved their information offices to knowledge offices to reflect this understanding and commitment. Companies need to rely more on innovative processes rather than individual inventors. Because these processes can involve dislocated teams and other resources, communication can easily become a bottleneck. There is a new appreciation for the variables involved in the productivity paradox, the dilemma where companies must decide if investments in technology will make things more effective. Results of several working groups revealed an understanding of why, in certain cases, economic returns were not commensurate
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with the IT investments. Many answers were behavioral in scope, primarily outlining the complex factors involved in:22 Preserving or expanding market share Avoiding risks or alternative costs Creating flexibility for changing business environments Improving the internal environment Improving the quality of products and interactions with customers.
4.1.5 Innovation in an Extended Enterprise Innovation also needs to be clarified for application to the Extended Enterprise,23 or value chain. Whether operating in joint ventures, partnerships, or ordinary customer-supplier relationships, companies need to apply similar management principles to external operations. This is more difficult when different company practices, and thus organizational cultures, have to be integrated. As companies work together to reach a common goal, they share information and resources so that the goal has the maximum net effect in the marketplace. The recognition of the value in alliances, supplier relationships, and customer partnering has led to a modern view of the enterprise as a value system rather than a value chain. The importance of such a view lies in an understanding that the flow of ideas and knowledge may be as important or more important than the flow of finances or materials per se. Three important flows...seem to be at the center of the emerging organizational relationships...flow of parts, components, and finished goods...flow of funds, skills, and other scarce resources...[and] flow of intelligence, ideas, and knowledge.24 This new cross-boundary thinking has promoted many process innovations, some because of quality and reengineering priorities. This has been driven or influenced by simultaneous supply-chain processes, collaborative marketing agreements with distributors, new forms of alliances and joint ventures with partners, and innovative approaches to customer interaction. There are numerous examples of companies expanding their perspective on what constitutes the enterprise that foster new forms of stakeholder innovation. This re-focus on the customer has been particularly important for companies in the business of providing technology solutions. This balanced technology-push/market-pull orientation places primary emphasis on what makes the customers successful (i.e., in their interactions with their own customers) rather than on what keeps them satisfied. Customers and other stakeholders are now considered sources of knowledge rather than mere recipients of products and services at the end of the food chain. Here are only a few examples of how companies have been rewarded for their focus on the enterprise: 25 Steelcase North America, a leader in the emerging field of knowledge infrastructure engineering, systematically developed their Personal Harbor product in consort with customer research, which was named the 1995 Business Week product of the year. Hoechst Celanese, one of the first companies to establish an Office of Innovation, developed an entire innovation course and used R&D as their connect point with customers, resulting in better articulation of unexpressed needs. Nortel (formerly Northern Telecom) has reduced time-to-market by 42-50% through a simultaneous process with customers called design-to-deployment.
22 23
Information Technology in the Services Sector, National Academy Press, 1994, pp. 12-13. See Extended Enterprise Collaboration, another NGM Imperative paper. 24 Bartlett, Chris and Ghoshal, Sumantra, Managing Across Borders: New Organizational Resources, Sloan Management Review, 1987, pp. 43-53. 25 Amidon, Debra M., Innovation Strategy for the Knowledge Economy: The Ken Awakening, 1997.
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4.1.6 Research & Development and Sources of Innovation Traditional R&D silos are undergoing major changes. Because R&D is inherently speculative, with its payoffs long-term and difficult to measure, pressures to cut back and enjoy the budget savings can be immense. This tendency to squeeze R&D is referred to as eating the seed corn.26 While R&D labs remain a significant source of innovation, NGM companies should realize that ideas and solutions can come from anyone. R&D labs will still be valuable to companies and countries in the future, but their operations need to be continually updated to maximize the input of knowledge and the output of results. 4.1.7 Innovation Assessment Tools, Metrics, and Methodologies Because management of innovation tends to lean to the soft side of business operations, it is difficult to measure. However, the innovative capability of a company is a good indicator of how competitive that company will be in the NGM environment. The Theory of Inventive Problem Solving, or TRIZ (its Russian acronym), is a methodology that attempts to harness the creativity inside each individual and facilitate the innovation process. While the TRIZ method has been around for quite some time, companies such as Ideation International, Inc. have built on it and applied modern computer technology to generate applications that customers can use to bring out innovative thinking. G.S. Altshuller, the creator of TRIZ,27 studied thousands of patents so that he could better define the innovation process. He realized that in most cases engineers were only looking for answers in a small fraction of the Solution Space the sum of all knowledge wherein potential solutions to a problem lie. 28 This unfortunately creates a situation where solutions exist but are not found by the problem solvers. In other words, more than 90% of the problems faced by engineers have, in some analogous form, been previously solved at sometime, somewhere. Sometimes the solution has been developed in a different department of the same company; sometimes in an entirely different and unrelated industry. 29 TRIZ attempts to reorganize they way people think so they can increase the rate of innovation; Altshuller extracted nine laws that govern the innovative evolution of an engineered system. Linking these tools with modern information technology, almost anyone can expand their view of the Solution Space. These knowledge networks then enable companies to shrink product and service development times while at the same time speeding up the process. Other efforts are also underway to map all current knowledge into a medium that can better enhance the creative abilities of people. Developed at Sandia National Laboratories, the algorithms will soon analyze connections between 3 million papers. The data is then represented as a three-dimensional landscape, where a mountain range signifying hot research issues in biology may connect to an area in physics by a narrow ridge...[Leading to] connections that were previously hidden. 30 Here are a few more examples: The Balanced Scorecard promoted by Renaissance Solutions includes a dimension for innovation and learning. The Knowledge Management Assessment Tool (KMAT) co-developed by Arthur Andersen and the American Productivity and Quality Center (APQC) now has hundreds of companies involved to survey best practices in knowledge management, the process that resembles the innovation process. The tool addresses leadership, culture, technology, measurement, and process.
26 27
Wysocki Jr., Bernard, U.S. R&D Spending Continues Fairly Brisk, The Wall Street Journal, 19 August 1996, p. A1. Altshuller, G.S., Creativity as an Exact Science: The Theory of the Solution of Inventive Problems, (translated from the Russian by Anthony Williams) Gordon and Breach, New York, 1984. 28 Ideation Methodology, Ideation International, Inc., 25 October 1995, sec. 1, p. 2. 29 Ibid., sec. 1, p. 11. 30 Steinberg, Steve G., Mapping Science, Wired, January 1997, p. 46.
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The Skandia Navigator, with the help of a network of Intellectual Capital controllers, monitors business success indicators, including the process of Renewal and Development (i.e., the service sectors equivalent to manufacturing R&D). Entovation International has defined ten interdependent modules in its Knowledge Innovation assessment process: Collaborative Process, Performance Measures, Education Development, Learning Network, Market Positioning, Products/Services, Alliance/Market Penetration, Market Image, Leadership/Leverage, and Technology/Internet. James M. Higgins & Associates has developed a detailed Innovation Quotient assessment tool that focuses on each of the Types of Innovation identified earlier. 4.2 State of the Art/Best Practice The state of the art/best practice in innovation management is rapidly evolving because companies are learning from each other. In the industrial economy, competition for scarce resources was the name of the game. The knowledge economy is one of abundance where the resources are expanded as they are shared. Companies and competitors are aligning in unprecedented collaborative research ventures. Best practices are being openly shared as one way to accelerate progress. Companies compete more aggressively than ever, but the rules have changed as companies seek to be innovation leaders in the markets they have chosen. 4.2.1 The American Productivity and Quality Center The American Productivity and Quality Center (APQC), based in Houston, Texas recently released a study that involved 20 sponsor companies. The primary focus was on Innovation and Knowledge Creation (i.e., how the discovery and rapid commercialization process leads to competitive advantage). Through collaborative research in six areas, they have identified a new value proposition: 1. Innovation is central to growth, now and in the future. 2. Competitive value depends on renewing unique knowledge and expertise both embedded in products and services and also systematically learning from experience. We can reduce cycle time and costs in our operations, increase proposals we win, and more effectively bring the knowledge of the company to bear on customer needs if we effectively find and transfer knowledge and best practice, and learn from our experiences.31 4.2.2 Business Intelligence Knowledge Management-in-Practice Study British Intelligence, a UK-based company, conducted a 1-year study of best management practices of major U.S. and European companies. Dozens of case studies and the findings from an Ernst & Young survey will be outlined in a forthcoming report, Management-in-Practice Study. 32 Preliminary results conclude that effective management of knowledge and of the innovation process will be core competencies that most companies need to succeed in tomorrows dynamic global economy. Many examples found companies that had achieved business growth, reduced costs, decreased time-to-market, and increased innovative products and services through systematic application of innovation and knowledge management processes. Case material was drawn from several early adopters. With the exception of lead practitioners, few had a large-scale innovation management process and tools to create and harness knowledge in a systematic way its identification, classification, sharing, and exploitation in products and services. However, the state of the practice is rapidly evolving at a geometric rate. Other early findings include: Implicit knowledge becomes explicit and usable knowledge leverage. Knowledge creation and development processes reform, if not replace, structured engineering approaches. Developing ways to measure the intellectual capital has become a great concern to most companies. Traditional accounting metrics need to be supplemented by these new methods.
31 32
Knowledge Management Consortium Benchmarking Study, APQC/IBC 1996. Amidon, Debra M. and Skyrme, David J., Knowledge Management in Practice: Profiles of Leadership, Business Intelligence, 1997.
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Technology, particularly through collaborative IT systems, is an effective enabler of the innovation process. However, the real challenge is creation and application (i.e., connecting people for real-time learning). Factors in creating knowledge infrastructure are knowledge leadership, defined roles and creativity, and learning and dialogue. Successful knowledge and innovation leaders need to have good conceptual capabilities and be effective communicators and extensive networkers. The report suggests that laggards, on the other hand, try to simplify the knowledge concepts into database models. Laggards tend to: Package and disseminate what is available rather than discovering what is most useful Limit their perspective to sharing of knowledge without understanding the fundamentals of knowledge creation (i.e., first stage) and application (i.e., third stage) in the innovation process Blindly follow business reengineering processes and downsize or outsource without appreciating the individual and corporate knowledge lost in the process Believe that knowledge is power instead of realizing that collective knowledge is more powerful Believe that they know all the answers and are resistant to new ideas. 4.2.3 Communities of Practice (CoP) In cooperation with the Institute for Research on Learning, Xerox executives launched a study to observe how employees actually did their jobs. What evolved was the notion of Communities of Practice, defined as follows: At the simplest level, they are a small group of people whove worked together over a period of time...not a team, not a task force, not necessarily an authorized or identified group...perform the same tasks...or collaborate on a shared task...or work together on a product. They are peers in the execution of real work. What holds them together is a common sense of purpose and a real need to know what the other knows. 33 The challenge is to keep business processes elegantly minimal or underprescribe formal procedures and create elbow room for local interpretations and innovations. You cannot build processes without the practices to implement and the most effective practices grow from the grassroots. 34 There are three basic principles for this new work environment within which innovation occurs: Processes dont do work, people do. Learning is about work, work is about learning, and both are social. Organizations are webs of participation. Change the patterns of participation, and you change the organization. The case example cited is National Semiconductor, which implemented the CoP strategy in its corporate restructuring. The agenda shifted from cutting costs to growing. By building the CoP focused on communications signal processing over a period of 18 months, the company was able to facilitate the process of swapping ideas, sharing insights, and cooperative problem-solving across business unit lines. Now there are four CoPs, with plans to extend the success of the community-building model. There is a CoP council operating under no specific guidelines to provide advice on communities of practice, offer technology support, and lobby for funding for community projects. There is even a CoP Tool-Kit, and groups are encouraged to create Web pages and communicate their work with the rest of the company.
33
Brown, John Seely and Gray, Estee Solomon, After Reengineering: The People Are the Company, Fast Company, Premier Edition, 1995. 34 Ibid.
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4.2.4 Stage Gate Model The Stage Gate Model 35 outlines the four Fs necessary to increase process efficiency: fluidity, flexibility, fuzzy gates, and focus, with concentration primarily on the notion of focus. The study revealed that many of the problems that beset product development are the result of poor prioritization, too many projects, and a lack of portfolio management. The lack of focus leads to people being spread too thin, projects moving at a snails pace, cycle time increasing, reduced quality of execution causing success rates to drop...and so on. The stage gate processes can, however, provide an excellent roadmap for driving projects to market. 4.2.5 Other Collaborative Efforts There are numerous consortial-type initiatives and programs sprouting. This list represents only a fraction of the good work being done: The Lotus Institute has launched an aggressive agenda focused on knowledge management and the innovation process. Ernst and Young created the Center for Business Innovation and premiered a major research effort at its Knowledge Advantage Conference in conjunction with the Strategic Leadership Forum. The APQC Study is being expanded in Europe. The Center for Innovation Management Studies at Lehigh University continually sponsors and organizes innovative research with a new focus each year. Conferences sponsored by organizations such as the Institute for International Research, the International Productivity and Quality Center, First Conferences and Management Center Europe are all focusing on the innovation process its purpose, infrastructure, and potential leverage. The Center for Creative Leadership has established a new Innovation Managers Association. The Office of Strategic Innovation, Inc. includes a School for Innovators and seminar programs geared toward Leadership through Innovation. 4.2.6 Some Specific Examples Many of todays radical company cultures are more evident in the IT industry. Companies such as Microsoft and Sun have made great strides in making their employees more comfortable and laid back, but most of all, excited about work. These are companies whose very existence relies on innovation. That factor will continue to increase in importance for manufacturing companies as well. 3M has long been respected for its innovative products. Interestingly, it is one of few companies that have a stated and working procedure for innovation. This critical difference has a strong impact on the culture and resulting effectiveness of employees. IT has yielded significant results, particularly in the service industry. In many companies, the IT function is assuming a new role in knowledge management. IT managers in companies have become knowledge managers with responsibilities for understanding the business strategy and managing the optimal electronic flow of dialogue. These companies are also developing tools that will help facilitate the process. In the past, companies tended to measure innovative performance by assessing the return on investment in R&D. Now, companies use measurements such as percentage of products and services sold that are new. Additionally, even more emphasis has been placed on time-to-market. At Electronic Data Systems (EDS), customer relationships are defined to fit into one of five levels. At the first level, interaction is minimal. For example, a company may ask that EDS provide a one-time service for a predetermined fee. The levels progress with escalating amounts of interaction in the relationship. Ideally, a customer will progress to level 5. This level assumes that the two (or more) companies have come together for a purpose, but the companies agree that there is a far more important reason for the partnership. In fact,
35
Cooper, R.G., Winning at New Products: Accelerating the Process from Idea to Launch, Addison-Wesley, 1993.
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level 5 represents a realization that in partnership the companies can innovate better than in separation. Together they invest today in a relationship that will reap unspecified gains in the future. 4.3 Pilots/Emerging State-of-the-Art Extensions Research indicates that companies are at various stages of implementing new innovation management concepts, and leadership has come from several functions in the innovation system. Most enterprises have begun to adopt growth strategies to counterbalance the negative effects of downsizing and restructuring that were originally driven by overhead reduction and profitability motives. Interestingly enough, proliferation of information technology seems to have significantly enhanced the innovation process. Examples of some of the more forward-thinking enablers of innovation in management processes are:36 Executive information systems that provide real-time information Electronic linkages to external partners in strategic processes Computer-based simulations that support learning-oriented planning Electronic conferencing and group decisionsupport systems Expert systems for planning and capital allocation Standard technology infrastructure for communication and group work Standard reporting structures and information Acknowledgment and understanding of current management behavior as a process.
The 1996 World Economic Survey of the Economist charts an innovation agenda relevant in the knowledge economy: The rich economies are coming to depend increasingly on the creation, distribution and use of information and knowledge, involving both technology and human capital. The most distinctive feature of the knowledge-based economy is not that it churns out lots of information for consumers though it does that too but that it uses knowledge pervasively as both an input and output throughout the economy. 37 The report queries which economies will benefit most from knowledge-based growth and concludes that future prosperity of rich economies will depend on both their ability to innovate and on their capacity to change. This phenomenon is not restricted to wealthy countries, but includes all economies of the world perhaps even more so for underdeveloped nations. The reliance on computer and communications technology varies from company to company depending on how the technology is valued as a competitive weapon. Following are several examples that illustrate the diversity of innovation approaches under experimentation. Skandia has taken the leadership in identifying the importance of intangible assets to the future of the company. By coordinating a network of internal intellectual capital controllers, it has developed a Knowledge Navigator to track the non-financial metrics of the company. This work has even helped lead the government of Sweden to declare 1997 as The Year of Innovation. Supplements to its annual report, the most recent of which is entitled Power of Innovation, have become the benchmark for companies interested in measuring and monitoring intellectual capital. The Mutual Group has implemented strategies to position the human resource function at the heart of an innovation system designed to capitalize on human talent. General Electrics Leadership Center is another example of how educational facilities can be converted to support executive mandates. Such initiatives, by design, include all participants in the innovation system. Everyones capability to create and apply new ideas becomes fundamental to sustained growth.
36 37
Davenport, Thomas H., Process Innovation: Reengineering Work Through Information Technology, Ernst & Young, 1993, p. 286. Woodall, Pam, The World Economy, The Economist, 28 September 1996
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Steelcase has engaged several functions of the innovation system as a way to transform not only the company, but the entire office equipment industry as well. With a cross-functional design research team working in close collaboration with customers Steelcase was able to apply progressive notions of real-time learning to the work environment. This resulted in an entire new line of products and services, implementation of the knowledge channel, and a new marketing campaign positioning the company as facilitating smarter places to work. If there is no explicit innovation function, the CEO manages the process by default. The CEO of Buckman Laboratories sets the direction, communicates the benefits, and, above all, leads by example. Advanced communications enhance the innovation process by placing the companys global expertise where it matters most the customer interface. The Intranet solution contains knowledge bases in the form of information libraries, bulletin boards, discussion forums, and virtual conference rooms. Buckman associates working with customers can tap the reservoir of knowledge and access colleagues wherever they might be. Buckman supports a community of one, expanding the power of associates by increasing the span of communication. Cash flow is not generated in the head office, but on the front line. In 1993, Dow was being awarded over 1200 patents a year resulting in a portfolio of 29,000 costing $30 million a year. Through a systematic portfolio review and leverage process, Dow saved over $1 million in 18 months by licensing patents that it holds but does not use. Its six-phase intellectual asset model links intellectual assets to the business needs: 1) contribution to business strategy, 2) competitor assessment, 3) asset clarification, 4) valuation of intellectual assets, 5) investment strategies to enhance value, and 6) intellectual portfolio management. With this framework, Dow hopes to increase annual licensing income from $25 million in 1994 to $125 million by the year 2000. One of the more sophisticated infrastructures for global use of computers and communications systems is at British Petroleum. It has approached the technology as a means to draw together the talents of a decentralized organization. Emphasis is on the process of communication, rather than on the transmission and accumulation of data. Modern capabilities (e.g., videoconferencing, multimedia, e-mail and realtime application-sharing) enable operating managers to talk more regularly and more informally without regard for traditional barriers of geographical or business location. The result has been significantly enhanced communication and idea-sharing leading to increased efficiency and effectiveness in decision making, reduced costs, improved scheduling, and faster (and more creative) problem solving. Because of the success of the pilot projects, plans are underway for a corporate-wide team to focus on knowledge and the innovation process. Analog Devices has evolved its quality focus into an innovation process using organizational learning theory. The rate of learning is the only sustainable competitive advantage, and waiting for a crisis or underperformance to motivate change is a formula for failure. In driving the quality agenda, a common language framework for strategy formulation emerged. All Analogs chief executives participated in weeklong training courses sponsored by the Center for Quality Management during which they explored strategies for incremental and breakthrough improvements. They benchmarked and developed predictive metrics to improve the performance of the financial and accounting services. Management promoted a community of inquirers learning from one another rather than a community of advocates with vested interests. Their 200-member sales force is committed to using groupware tools worldwide as a vehicle to incorporate division, market, and engineering resources to cut time-to-market. Financial results with increases in net income of 60% and profits of 53% demonstrate the powerful business case for such learning and innovation strategies. The following example shows how companies can facilitate innovation when they want to do so: Companies traditionally implement special teams for very important projects. Unfortunately, these special teams are often put to work due to some sort of emergency. These teams are often successful because common barriers have been specifically lifted to facilitate a quick and effective result. Today, companies continue to put special teams to work in R&D, often under the name of skunk works (after the Lockheed Corporation Skunk Works facility in Burbank, California, which produced the SR-71 Blackbird reconnaissance aircraft, the F-117 Stealth fighter, and other classified military systems in the 1960s, 70s,
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and 80s). Historically, the concept applied to the underground activities of those projects not yet legitimized in the corporate business plan. Perhaps this is because there is no above-ground systematic process. Regardless, as more of these efforts prove profitable and lead to sustainable growth, the innovation process is likely to be made more explicit, with appropriate incentives and rewards built into the system to optimize results. For example, the skunk works at Ford was designed with the following characteristics: 38 The cross-functional team was comprised of seven engineers of proven competence, with management experience, selected from the operating divisions and on extended loan from them. The skunk works was located in rented quarters, physically separate from other parts of the company, but within easy driving distance from company resources. The facilities were designed and laid out to promote creativity and facilitate product exhibition. There was absolutely no bureaucratic red tape! Paperwork was minimal; time use was therefore very efficient. Reverse-engineered hardware was the primary deliverable. Sufficient funding was provided from the start. It was not necessary to spend time hunting for money. There was strong support from the group executive and the general managers of the operating divisions. Management chains were very short. The example above should not be misunderstood. It is not recommended that companies race to build up their own skunk works. Instead, the characteristics of the skunk works should be studied and applied throughout the entire company, and not only to specific teams. It is ironic that companies have long known what rules needed to be broken to facilitate innovation, but they have limited the ability to break those rules to only a very small number of operations.
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Single, Arthur W. and Spurgeon, William M., Creating and Commercializing Innovation Inside a Skunk Works, Research-Technology Management, January-February 1996, pp. 38-39.
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5.0 ACTION PLAN RECOMMENDATIONS Only two decades ago, the concept of producing defect-free products (zero defects) was at best a slogan something to rally around, certainly not attainable or even necessary. Today it is part of the price of admission for manufacturing companies approaching six sigma (3 parts per million) quality levels; some are even beginning to take aim at 3 parts per billion! Fast cycle times, still a discriminator in the mid-1990s, is recognized by the pacesetters as a common trait of the NGM community. How were these kinds of improvements in achieved? Through innovations in how work was done, both on the factory floor and in the development process. The NGM company will look, think, and do work differently than todays manufacturer and will be continuously changing. The ability to innovate not only products and services, but also processes, strategies, organizational structures, and enterprise designs, and to rapidly change them, will become the next discriminator, and perhaps soon the price of admission for U.S. manufacturers in the world market. It is important that comparative studies (between countries and companies) focus on the search for factors which determine innovation excellence, in particular properties such as innovation power to initiate innovations and effective implementation.39 Development of any innovation strategy should be viewed from both the micro- and macro-economic levels. 5.1 Action Recommendations for Companies There are a series of initiatives that can be taken from the individual company perspective, albeit with the extended enterprise in mind. A dynamic economy demands participation on regional, national, and global scales in order to optimize results. Thus, there are actions from the larger perspective which, if implemented, could directly impact the quality and effectiveness of local and internal innovation efforts. One way to begin is to calibrate innovation capacity with the Knowledge Innovation sm Litmus Test:40 1. Is one person chartered with overall responsibility to manage the corporate-wide innovation process? 2. Are there performance measures quantitative and qualitative to assess your innovation practices? 3. Do your training/educational programs have provisions to incubate and spin-out new products and businesses? 4. Does your local, regional, or international presence operate as a distributed network of expertise that learns from as well as distributes to customers? 5. Is there a formal intelligence gathering strategy to monitor the positioning of both current and potential competitors? 6. Does the rate of production of new products and service exceed the norms of your industry and create new markets in which you can excel? 7. Has a strategic alliance manager been designated to create and manage the network of partnerships and joint ventures to leverage your firm? 8. Does your marketing image portray an organization with the capacity to create and move ideas into the marketplace to make your customers successful? 9. Have resources been allocated to articulate a compelling vision internally and share company expertise externally through publications and participation in major forums? 10. Is your computer/communications capability treated as a learning tool for internal conferencing and external business leverage on the World Wide Web?
39 40
Cozijnsen, Anton and Vrakking, Willem, eds., Handbook of Innovation Management, Basil Blackwell Ltd., 1993, p. 12. http://www.entovation.com, Copyright 1996 Entovation International, All rights reserved.
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The following ten steps can enable a company to see where it is on the scale of innovation management capability and how it can establish a strategy. These steps represent various aspects of the innovation process: creation, conversion and commercialization. They are not intended to be all-inclusive, but are a starter set of ways to think about the innovation process as a system of interdependent activities. As with any corporatewide initiative, companies must establish key players, agree on a framework for dialogue, create an implementation strategy (ideally, after stakeholders have been interviewed), manage the process, evaluate results, and be open to new ideas and unexpected business opportunities. 1. Foremost, the innovation process should be made explicit by identifying a corporate officer and crossfunctional team responsible for the process. Innovation can be stated as a core value of the firm, thereby ensuring that all participants in the process recognize its importance. 2. Once the process is defined, including the roles of all stakeholders, attempts should be made to define the metrics of progress both tangible and intangible that define the performance of the system. Recognize that metrics difficult to define may be the best measures of success. Develop the business case based on a new value proposition that promotes creation, exchange, and application of new ideas. Develop key indicators and early warning signals that might be tracked in a periodic review. Be attentive to what incentives can be built into the system to foster the behavior necessary in an innovative environment. 3. Take stock of the education/training capability of the firm and from where its ideas originate. Consider the implications of a real-time learning environment that may not be classroom-based. Provide an infrastructure the incubation of new business ideas that might develop into products/services and even new businesses that might contribute to the bottom line. 4. Consider your local, national, regional, and worldwide presence. How might these locations be converted into a distributed learning network that treats stakeholders, including customers, as sources of knowledge? 5. Pay attention to the competitive environment, but ensure your radar is wide enough to capture potential competitors who may not even be a factor in your industry today. Ensure that any intelligence activity is designed as a feed-forward system to those with the need to know. Where appropriate, rely on the finest computer and communications technology available to facilitate the process. 6. Review the metrics of your own product and service development for example, the number of new products/services fielded in a given period as a percentage of sales. Perform a serious analysis of the knowledge economy and the implications for your business. Consider some new adaptations that capitalize on knowledge-based products and the knowledge delivery channel. 7. Take stock of the variety of alliance research, joint venture, cooperative marketing, etc. Determine how they are being managed in ways that are consistent and provide documentation of successes and failures. Consider the portfolio of research alliances developed by your competitors, their inherent strategy, and potential impact on your performance. 8. Review your media/advertising strategy to see how it maps to the intellectual capacity and innovative environment you have or seek to establish. Review how marketing and public relations strategies are linked with other functions in the innovation process in ways that promote simultaneous development and optimize resource leverage. 9. Rethink your leadership strategy in an age that demands the visible sharing of knowledge. Determine your sphere of influence and how to best leverage the talents of your workforce. 10. Asses your technical infrastructure for internal and external communication (e.g., computers, software, multimedia, Intranets, Internet, videoconferencing, collaborative applications, etc.) capability and effectiveness of its management. Consider the overall behavior necessary in the innovative environment and determine if the systems afford opportunities to manage the corporate memory, enhance electronic dialogue, deliver on-site training, and learn from participation for continuous process improvement.
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In plotting their course of action to embrace innovation management as a core competency, companies need to remember to: Place innovation management as an explicit priority in all strategic planning In managing change, ensure that the people within the company are motivated to enhance innovation Ensure that the concepts of innovation are crisp and clearly linked to business success throughout the company Make clear to all the company that innovation applies to all work, not just to product and manufacturing processes Develop and implement metrics and performance measures that encourage innovative team work Avoid punishing failure when attempting constructive innovation Take into account the importance of innovation when designing and implementing Extended Enterprise relationships 5.2 Action Recommendations for Industry and the Nation As with all of the NGM Imperatives, collective action by industry, government, and the academic community is required to drive the process of change and attack cross-cutting infrastructure barriers. A national strategy for innovation requires that the nation focus on:41 Preserving core competencies in science and a professional cadre of scientists and engineers Facilitating ongoing technological innovation (e.g., the process by which knowledge is translated into technology) Building connectivity among the performers and users and knowledge and technology a requisite of complex innovation systems Ensuring a policy environment that encourages and rewards investment in innovation Supporting an educational process in which individuals learn how to learn to adapt flexibly to change.
41
Brown, Harold, Herzfeld, Charles, and van Opstal, Debra, Global Innovation/National Competitiveness: A Report of the CSIS Senior Policy Group an National Challenges and the Senior Action Group on R&D Investment Strategy, The Center for Strategic & International Studies, 1996, p. 45.
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6.0 SOURCES Sources for this document are categorized into four sections: Articles, Books, Government Documents, and World Wide Web (WWW) sites. Articles
1. 2. 3. 4. 5. 6. 7. 8. Bartlett, Chris and Ghoshal, Sumantra. Managing Across Borders: New Organizational Resources, Sloan Management Review, 1987, pp. 43-53. Berkowitz, Leonard. Wish Program for Major Innovations, Research-Technology Management, May-June 1996, pp. 11-13. Bloomquist, Lee G. Learn from Warren Buffetts Way, Research-Technology Management, March-April 1996, pp. 7-9. Brown, John Seely and Gray, Estee Solomon. After Reengineering: The People Are the Company, Fast Company , Premier Edition, 1995. Cusumano, Michael A. and Selby, Richard W. How Microsoft Competes, Research-Technology Management, January-February 1996, pp. 26-30. Edelheit, Lewis S. Renewing the Corporate R&D Laboratory, Research-Technology Management, 1995, pp. 14-18. Galvin, Robert W. Real Leaders Create Industries, Research-Technology Management, NovemberDecember 1995, pp. 8-9. Higgins, James M. The Core Competence, Planning Review, November-December 1995, pp. 33-36.
9. Ideation Methodology. Ideation International, Inc., 25 October 1995. 10. Industrial Research Institutes R&D Trends Forecast for 1996. Research-Technology Management, JanuaryFebruary 1996, pp. 15-17. 11. Jacob, Rahul. Why Some Customers Are More Equal Than Others, Fortune, 19 September 1994, pp. 215-224. 12. Knowledge Management Consortium Benchmarking Study, APQC/IBC 1996. 13. LaBarre, Polly. How Skandia Generates Its Future Faster, Fast Company , DecemberJanuary 1997, p. 58. 14. Macoby, Michael. Knowledge Workers Need New Structures, Research-Technology Management, JanuaryFebruary 1996, pp. 56-58. 15. Miller, William L. A Broader Mission for R&D, Research-Technology Management, November-December 1995, pp. 24-36. 16. Millson, Murray R., Raj, S.P., and Wilemon, David. Strategic Partnering for Developing New Products, Research-Technology Management, MayJune 1996, pp. 41-49. 17. Myers, Mark B. and Rosenbloom, Richard S. Rethinking the Role of Research, Research-Technology Management, May-June 1996, pp. 14-18. 18. Rogers, Debra M. Amidon. The Challenge of Fifth Generation R&D, Research-Technology Management, July-August 1996, pp. 33-41. 19. Single, Arthur W. and Spurgeon, William M. Creating and Commercializing Innovation Inside a Skunk Works, Research-Technology Management, January-February 1996, pp. 38-41. 20. Steinberg, Steve G. Mapping Science, Wired , January 1997, p. 46. 21. Stevens, Tim. Converting Ideas Into Profits, Industry Week , 3 June 1996, pp. 17-24. 22. Thurlings, Bert and Debeckere, Koenraad. Trends in Managing Industrial Innovation: First Insights from a Field Survey, Research-Technology Management, July-August 1996, pp. 13-14. 23. U.S. Department of Commerce, 1995 Award Criteria, Malcolm Baldrige National Quality Award, pp. 1-50.
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24. What Work On Innovation, Production Magazine, November 1995. 25. Woodall, Pam. The World Economy, The Economist, 28 September 1996 26. Wysocki Jr., Bernard. The Outlook: Big Corporate Layoffs Are Slowing Down, The Wall Street Journal , 12 June 1995, p.1. 27. Wysocki Jr., Bernard. U.S. R&D Spending Continues Fairly Brisk, The Wall Street Journal , 19 August 1996, p. A1. 28. Yovovich, B.G. Downsizing Anxiety Can Stifle Innovation, Business Marketing, October 1995, p. 53.
Books
1. 2. 3. 4. 5. Altshuller, G.S. Creativity as an Exact Science: The Theory of the Solution of Inventive Problems, (translated from the Russian by Anthony Williams), Gordon and Breach, New York, 1984. Amidon, Debra M. Innovation Strategy for the Knowledge Economy: The Ken Awakening, ButterworthHeinneman, 1997. Amidon, Debra M. and Skyrme, David J. Knowledge Management in Practice: Profiles of Leadership, Business Intelligence, London, 1997. Audretsch, David B. Innovation and Industry Evolution, MIT Press, Cambridge, 1995. Brown, Harold, Herzfeld, Charles, and van Opstal, Debra. Global Innovation/National Competitiveness: A Report of the CSIS Senior Policy Group an National Challenges and the Senior Action Group on R&D Investment Strategy, The Center for Strategic & International Studies, Washington, D.C., 1996. Cooper, R.G. Winning at New Products: Accelerating the Process from Idea to Launch, Addison-Wesley, Reading, MA, 1993. Cozijnsen, Anton and Vrakking, Willem (eds.) Handbook of Innovation Management, Basil Blackwell, Ltd., Cambridge, 1993. Davenport, Thomas H. Process Innovation: Reengineering Work Through Information Technology, Harvard Business School Press, Boston, 1993. Donald D. Davis and Associates. Managing Technological Innovation: Organizational Strategies for Implementing Advanced Manufacturing Technologies, Jossey-Bass, Inc., San Francisco, 1986.
6. 7. 8. 9.
10. Edosomwan, Johnson A. Integrating Innovation and Technology Management, John Wiley & Sons, Inc., New York, 1989. 11. Foster, Richard N. Innovation: The Attackers Advantage, Summit Books, New York, 1986. 12. Freedman, George. The Pursuit of Innovation: Managing the People and Processes That Turn New Ideas Into Profits, American Management Association, New York, 1988. 13. Goldman, Steven L., Nagel, Roger N. and Preiss, Kenneth. Agile Competitors and Virtual Organizations: Strategies for Enriching the Customer , Van Nostrand Reinhold, New York, 1995. 14. Hall, Peter (ed.). Technology, Innovation and Economic Policy, St. Martins Press, New York, 1986. 15. Hall, Robert. The Soul of the Enterprise: Creating a Dynamic Vision for American Manufacturing, HarperCollins, New York, 1993. 16. Heil, Gary, Parke, Tom, and Tate, Rick. Leadership and the Customer Revolution, Van Nostrand Reinhold, New York, 1995. 17. Higgins, James M. Innovate or Evaporate, New Management Publishing Company, Inc., Winter Park, FL, 1995. 18. Kash, Don E. Perpetual Innovation: The New World of Competition, Basic Books, Inc., New York, 1989. 19. Larsen, Chuck. Annual Report of the Industrial Research Institute, 1996. 20. Leonard-Barton. Dorothy, Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation, Harvard Business School Press, Boston, 1995. 21. Lipnack, Jessica and Stamps, Jeffrey. The TeamNet Factor: Bringing the Power of Boundary Crossing to the Heart of Your Organization, Oliver Wight Publications, Essex Junction, Vermont, 1993.
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22. Martin, Michael J.C. Managing Innovation and Entrepreneurship in Technology-Based Firms , John Wiley & Sons, Inc., New York, 1994. 23. Mintzberg, Henry. Mintzberg on Management: Inside Our Strange World of Organizations, Free Press, 1989. 24. Parker, R.C. Going for Growth: Technological Innovation in Manufacturing Industries, John Wiley & Sons, Ltd., Chichester, 1985. 25. Parker, R.C. The Management of Innovation, John Wiley and Sons, Ltd., Chichester, 1982. 26. Patterson, Marvin L. and Lightman, Sam. Accelerating Innovation: Improving the Process of Product Development , Van Nostrand Reinhold, New York, 1993. 27. Pennings, Johannes M. and Arend Buitendam (eds.), New Technology as Organizational Innovation, Ballinger Publishing Company, Cambridge, 1987. 28. Preiss, Kenneth, Goldman, Steven L., and Nagel, Roger N. Cooperate to Compete: Building Agile Business Relationships, Van Nostrand Reinhold, New York, 1996. 29. Quinn, James Brian. Intelligent Enterprise: A Knowledge and Service Based Paradigm for Industry , The Free Press, New York, 1992. 30. Roberts, Edward B. (ed.) Generating Technological Innovation, Oxford University Press, New York, 1987. 31. Roman, Daniel D. and Puett Jr., Joseph F. International Business and Technological Innovation, Elsevier Science Publishing Co., New York 1983. 32. Senge, Peter. The Fifth Discipline, 1990. 33. Smith, Preston G. and Reinertsen, Donald G. Developing Products in Half the Time, Van Nostrand Reinhold, New York, 1991. 34. Statistical Abstract of the United States 1995: The National Data Book, U.S. Department of Commerce, Economics and Statistics Administration, Bureau of Census, 115th Edition. 35. Swann, Peter (ed.) New Technologies and the Firm: Innovation and Competition, Routledge, New York, 1993. 36. Urban, Glen L. and Hauser, John R. Design and Marketing of New Products, Prentice Hall, Englewood Cliffs, NJ 1993. 37. Utterback, James M. Mastering the Dynamics of Innovation: How Companies Can Seize Opportunities in the Face of Technological Change, Harvard Business School Press, Boston, 1994. 38. Van de Ven, Andrew H., Angle, Harold L., and Poole, Marshall Scott (eds.). Research on the Management of Innovation: The Minnesota Studies, Harper & Row, New York, 1989. 39. Wheatly, Margaret. Leadership and the New Science, Berett-Koehler Publishers, 1992.
Government Documents
1. 2. 3. Information Technology in the Services Sector, National Academy Press, 1994. U.S. Department of Commerce, Building the American Dream: Jobs, Innovation, and Growth in Americas Next Century, U.S. Government Printing Office, August 1996. National Science Board, Science & Engineering Indicators 1996, U.S. Government Printing Office, 1996
World Wide Web (WWW) Sites

1. 2. 3. 4. 5. 6. 3M Innovation Network: http://www.3m.com/ Agility Forum: http://www.agilityforum.org Eastman Chemical Company: http://www.eastman.com/corp/emninnov.shtml Entovation International: http://www.hiway.co.uk/skyrme/entovatn.htm Innovation Research Centre: http://irc.mcmaster.ca/irc/irc.htm National Science Foundation: http://www.nsf.gov/
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Next-Generation Manufacturing Processes & Equipment

January 1997
Prepared By: The NGM Manufacturing Processes & Equipment Thrust Team
CONTRIBUTORS Robert Burleson, Lawrence Livermore National Laboratory, Team Leader Dick Kegg, Cincinnati Milacron, Team Leader Irving Stowers, Lawrence Livermore National Laboratory, Lead Author Curt Airhart, OEC Medical Systems Len Allgaier, National Center for Manufacturing Sciences Bill Barkman, Lockheed Martin Energy Systems Tom Barlow, Lawrence Livermore National Laboratory John Bedinger, Texas Instruments David Bradshaw, Lockheed Martin Energy Systems Phil Bretz, Alcoa Corporation Bill Brosey, Lockheed Martin Energy Systems Marshall Burns, Ennex Fabrication Technologies Richard Cassidy, Lockheed Martin Electronic Systems John Davis, Telxon Corporation Howard Gerth, Lockheed Martin Energy Systems Tom Herlay, Miller Electric Automation Joe Ivaska, Jr., Tower Oil and Technology Sharon Johnson, Worcester Polytechnic Institute John Kohls, Cincinnati Milacron Jim Koontz, Kingsbury Corporation Bruce Kramer, National Science Foundation Frank McCarty, Society of Manufacturing Engineers Howard McCue, Lawrence Livermore National Laboratory Mike McEvoy, Baxter Healthcare Fred Michel, Agility Forum James ONeil, Kingsbury Corporation Anand Paul, Concurrent Technologies Corp. Eldon Ray McClure, Tumax Engineering Bob Reuter, Sandia National Laboratories Robert Swanson, Concurrent Technologies Corp. Nick Terzis, Pratt & Whitney Bikash Thapliya, Massachusetts Institute of Technology Frank Tidaback, Caterpillar Ray Walker, Pratt & Whitney
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The NGM Framework

Global Drivers
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People
The NGM Company

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H L M H H H H M L M
H H H H H M L M M H
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H H H H H M M M H H

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M M H M
H H
H H H
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M - Medium Impact
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H H H M
Impact On
Change Management

H M M H H M L M H H
Global Drivers
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Investment/Finance
Technology
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Knowledge Supply
Product Life Cycle
Human Resources
Sourcing/Teaming
Environmental
Innovation
CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 Introduction ........................................................................................................................................... 3 2.0 Imperative Definition ............................................................................................................................. 5 2.1 Barriers ............................................................................................................................................. 5 2.2 Enablers ............................................................................................................................................ 6 2.3 Metrics ............................................................................................................................................. 7 2.4 Action Plans...................................................................................................................................... 8 3.0 Relationships to NGM Attributes ........................................................................................................ 10 3.1 Benefits of the Imperative ............................................................................................................... 10 3.2 Relationship of Enablers to Barriers ................................................................................................ 11 4.0 Enablers for Overcoming Barriers ........................................................................................................ 12 4.1 Process and Equipment Understanding........................................................................................... 12 4.1.1 Development of Methods for Understanding Manufacturing Processes ................................ 12 4.1.2 Benchmarking of Manufacturing Processes on a Global Scale ............................................... 14 4.1.3 Fundamental Research and Its Transfer................................................................................. 15 4.1.4 Modeling and Simulation of Processes and Equipment ......................................................... 17 4.2 Process and Equipment Acquisition and Implementation ............................................................... 19 4.2.1 Development of Equipment Standards.................................................................................. 19 4.2.2 Development of Intelligent Closed-Loop Processes ............................................................... 20 4.2.3 Information Sharing of Processes and Equipment ................................................................. 23 4.2.4 Predictive Maintenance ......................................................................................................... 24 4.3 Enabling Technologies.................................................................................................................... 25 4.3.1 Flexible, Modular, and In-line Cellular Processes and Equipment ......................................... 25 4.3.2 High-Speed Machining ......................................................................................................... 26 4.3.3 Macro-, Micro-, and Nano- Technologies ............................................................................. 27 4.3.4 Rapid Prototyping ................................................................................................................. 28 5.0 Action Plans ......................................................................................................................................... 30 5.1 Development of a Process Design Environment ............................................................................. 31 5.2 Development of Intelligent Processes and Equipment..................................................................... 33 5.3 Development of a Manufacturing Collaborative Environment........................................................ 36 5.4 Summary of Action Plans ............................................................................................................... 37
ACRONYMS & ABBREVIATIONS API BMP CAD CAM CCD CFC DEC DF DNC DoD DOE HiTaR HSEMC ICLP IM&TD IP&E IPPD I/O JIT MEMS MMP MPE NASA NC NCMS NGM OAC OEM PDE PDW R&D REC RP RPPR SCBE TEAM application programming interface Best Manufacturing Practices computer-aided design computer-aided manufacturing charge coupled device chlorofluorocarbon Digital Equipment Corporation direct fabrication distributed numerical control Department of Defense U.S. Department of Energy High Throughput and Reliability Hamilton Standard Electronic Manufacturing Center intelligent closed-loop processing Information Management and Technology Department Intelligent Processes and Equipment integrated product/process development input/output just-in-time micro-electro-mechanical systems Modular Manufacturing Processes Manufacturing Processes and Equipment National Aeronautics and Space Administration numerical control National Center for Manufacturing Sciences Next-Generation Manufacturing open-architecture controller original equipment manufacturer Process Design Environment Process Design Workstation research and development Regional Evaluation Center rapid prototyping rapid product/process realization standardized, characterized building element Technologies Enabling Agile Manufacturing
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EXECUTIVE SUMMARY Next-generation manufacturing processes and equipment are reconfigurable, scaleable, and cost-effective manufacturing processes, equipment, and plants implemented by developing an ever-growing knowledge base of the science of manufacturing, and used to allow a company to rapidly adapt to specific production needs. Why is it Important? Global competitiveness and, particularly, responsiveness to changing needs, dictates that NGM companies have a better understanding of their core competencies and manufacturing processes and that the factories be quickly and efficiently reconfigurable to meet changing needs. Companies and enterprises that possess such understanding and flexibility will beat competitors to the market with cost-effective products. Next-Generation Manufacturing Processes and Equipment are necessary to achieve the following NGM attributes: Customer Responsiveness: by allowing optimal choice of processes and equipment to meet customer needs within an extended enterprise Physical Plant and Equipment Responsiveness: by using modular and reconfigurable processes and equipment Global Market Responsiveness: by developing deep knowledge of foreign processes and equipment technologies to allow rapid response to foreign opportunities Teaming as a Core Competency: by allowing members of an extended enterprise to share processes and equipment knowledge while maintaining core competencies. Key Concepts To achieve this end, a company must: Evaluate new processes and equipment in anticipation of changing customer needs Improve corporate understanding of manufacturing processes (core competencies) and how these processes affect the quality, producibility, reusability, and disposability of products Develop and employ highly capable and motivated individuals as team members to optimize manufacturing process configurations Encourage teaming and partnering to acquire all needed capabilities for implementation of optimized process configurations Develop standards for equipment and software to securely communicate, store, organize, retrieve, and process manufacturing information within the extended enterprise. Whats New? Information technology will secure an ever-greater influence on manufacturing equipment and shop-floor manufacturing processes. Information from the IPPD and RPPR processes will be drive the semiautomated construction of detailed process plans. Process planning software will be created from the specialized knowledge of skilled craftsmen, engineers, supervisors, maintenance personnel, and process planners. New software tools installed in more powerful general-purpose workstation will allow many alternative manufacturing processes and equipment configurations to be simulated and evaluated before work is released to the floor. Process plans and alternative processing configurations will be searched and recalled from data archives. Using new information technologies, extended enterprise partners will share historical process plans to evaluate alternatives when considering future production options.
Modular machine tools and controls will allow rapid configuration of factories from discrete process equipment and modular control equipment. Open-architecture controllers will be automatically programmed and configured to operate for either small or large lot sizes based on information contained in detailed process plans. Modular processing equipment will allow complex processing machinery to be assembled from smaller, well-characterized subcomponents. When a production run is completed, the processing equipment will be disassembled and stored for reuse in similar or new configurations. Action Recommendations 1. Develop a new Process Design Workstation, enabling process engineers to continuously improve understanding of manufacturing processes and create optimized process configurations. 2. Develop new Intelligent Processes and Equipment hardware to implement optimized process configurations on the shop floor using modular machine tools and modern computer control equipment. 3. Develop a Collaborative Manufacturing Environment to supply knowledge to process designers and shop-floor employees to enable factory operation as an extended enterprise.
1.0 INTRODUCTION Process Development History Processes for mass production have been in existence since the dawn of the industrial revolution in the 19th Century. Many unit processes such as cutting, drilling, welding, and forging existed before the industrial revolution and were considerably refined afterwards. Mass production is based on two concepts: 1) interchangeability of parts and 2) sequential construction and assembly. Historically, the knowledge of manufacturing processes was held first by guilds and then by tradesmen. Automation quickly augmented hand tools with power-driven tools; however, the workers skill and experience still determined the quality of the final product. The subsequent introduction of computer-controlled equipment expanded the capability of machining operations and allowed some of the manufacturing skill requirements to be satisfied by the manufacturing equipment. This event marked the transition from experience-based to knowledge-based operation of machinery and equipment. This innovation lessened the skill requirements for operators in automated manufacturing facilities but necessitated the creation of part programmers to prepare the instructions for the machinery. Soon process engineers evolved who understood more of the science of a process and who would interface between the product designer and the part programmer to develop a manufacturing process for a particular part. The manufacturing process for a new part was usually implemented off-line before introducing the part onto an existing process line. This off-line work generally involved the construction of several prototype parts or assemblies to determine both part-to-part dimensional consistency and assembly incompatibilities. Needless to say, this development of a manufacturing process and the related prototype production effort represented a significant investment. Today we are entering an era where much manufacturing unit process information has been researched and the scientific knowledge exists in academic reports but is not routinely used in preparing manufacturing process plans. Todays machine controllers are rapidly evolving and are becoming devices that can be reconfigured easily and rapidly to accommodate changes in geometric design, additions or deletions of features to meet customer requirements. Sensor signals can now be input to perform unique on-machine process changes and to perform self-diagnostics to verify operational readiness. The advent of easily reconfigurable knowledgebased controllers in conjunction with reconfigurable sensor equipment will make agile manufacturing a viable option for Next Generation enterprises. The Rapid Product/Process Realization imperative discussed elsewhere in this NGM report addresses both the front-end (product design) and back-end (product production, maintenance, and recycling) efforts associated with conceptualizing a product and transitioning it to hardware. The front-end effort involves computer-aided design, functional modeling, virtual or actual prototyping, manufacturing process selection, and virtual manufacturing or factory simulation. The back-end effort addresses design for assembly, disassembly, disposal and/or reuse, and other environmental issues. The widespread availability of high-speed communications will make it possible for factories to become distributed and transitory in the sense that the specific processing necessary to assemble small-lot-size jobs may be distributed physically but can be commanded to operate via instructions from a computer somewhere in an extended enterprise. The advent of remotely operated or remotely initiated processing will mark a transition in manufacturing as profound as numerical control when it was first demonstrated. It will also allow true manufacturing agility and the ability to fabricate parts in a lot size of one as easily and efficiently as a lot size of 1000 or more. Process Equipment History Numerical control (NC) of machine tools was first demonstrated in 1959. This development allowed machine tool users to coordinate the movement of multiple axes and to produce high-quality workpiece contours. NC machine tools were constructed with 2, 3, 4, and even 5 axes of motion and were quickly put to use in making jigs, fixtures, and tools and in the machining of complex components such as aircraft wings
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and turbine blades. The tool path was computed off-line using computer-aided manufacturing software and delivered to the machine in the form of a paper tape. An improvement over this system was demonstrated in 1972 when the tool-path file was delivered directly to the machine tool over a local area network. During the 1980s and early 1990s, NC machine tools were operated by complex push-button consoles, with the tool path being computed off-line and downloaded to the machine tool. During the early 1990s the machine tool controller business became dominated by a few foreign vendors. During this time, it became clear to machine tool builders and sophisticated machine tool and robotics users that it was very difficult to build special-purpose machinery and robotics equipment without access to the source code running on proprietary controllers. Access to this software is needed to implement advanced closed-loop control strategies. These enhanced process control techniques combine additional process sensors with advanced control algorithms to achieve higher product quality and more robust operations. Implementing such algorithms requires the availability of open-architecture controllers, which are becoming available today. Tomorrows manufacturing equipment and accompanying knowledge-based controllers will need to be reconfigured to perform unique tasks for nearly each part type that they process. Such adaptation will require sufficient information to allow operation in a near-optimal configuration even when only a single part of the same configuration is produced (lot size of one).
2.0 IMPERATIVE DEFINITION To prosper in todays marketplace, a manufacturing company must continuously strive to improve its position relative to its competitors. While this dictates varying degrees of investment in different situations, the need to understand the fundamentals of and improve manufacturing processes and equipment is a critical requirement of a competitive company. This improvement allows a company to be effective in meeting existing customer needs as well as anticipating and satisfying changing manufacturing requirements. From a technical perspective the imperative is defined as developing a fundamental understanding of processes and equipment so they can be developed, modified, and deployed more rapidly in an optimized system. The NGM Company will use an ever-growing knowledge base of manufacturing science to implement reconfigurable, scaleable, and cost-effective manufacturing processes, equipment, and plants that can rapidly adapt to specific production needs. The staff of the extended enterprise will need an ever-increasing knowledge of manufacturing processes, information systems, capability for working in teams (local and geographically distributed), and a higher level of understanding of the needs and goals of the NGM Company. Responsiveness is the ability to change capacities or products in a given production line and to reconfigure the line itself. It includes the capability of dealing with evolving environmental requirements. This is illustrated by the following transitions:
Today Fixed Capacity Recyclable Product Hard Tooling Automatic Equipment Rigid Plant & Equipment Next Generation
Variable Capacity Recyclable Product, Plant, Property, & Equipment Hard & Soft Tooling Autonomous Equipment Reconfigurable Plant & Equipment
These improvements are prevented in many companies by the barriers listed in Section 2.1. Since the enablers to overcoming the barriers are broadly described and apply differently to different industrial sectors, three actions plans have been described that, when implemented, will allow many companies to achieve the MP&E imperative and move toward acquiring the attributes of an NGM Company. 2.1 Barriers The following barriers restrict a companys ability to achieve the Imperative and to survive in the competitive marketplace. Some of these barriers relate to an individual companys failure to take advantage of available resources or technologies; other barriers are related to the lack of important manufacturing tools. This list of barriers is not exhaustive, but represents typical barriers facing todays manufacturing companies. This list was compiled from the existing Roadmaps document 1 and from other sources. Nonetheless, all of these barriers need to be overcome to become an NGM Company. 1. 2. 3. 4. Lack of fundamental understanding of the behavior of manufacturing processes and equipment Lack of communication among product designers, process designers and machine tool builders Failure to recognize the need to understand manufacturing processes Lack of understanding of which process, equipment, and system capabilities determine critical product characteristics 5. Lack of knowledge of the available methods for characterizing manufacturing processes and equipment 6. Lack of knowledge of process control technology 7. Unavailability of sensors that provide information to characterize specific manufacturing operations
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Digest of Current U.S. Industry Roadmaps, NGM Program, July 1996.
8. Shortage and limited applicability of existing process modeling and simulation tools 9. Limited awareness of, or reluctance to use, knowledge and development work from outside of the immediate organization 10. Inability to analyze trade-offs involving processes, equipment, life-cycles, and capital investments 11. Purchase of past-generation, inflexible manufacturing equipment that restricts the incorporation of future product and process advancements 12. Corporate inertia arising from significant prior investments in old processes and equipment 13. Difficulty in justifying new equipment or process R&D based on short-term return-on-investment calculations 14. An insufficient number of international standards that are tailorable yet sufficiently robust and that specify form, fit, and function technical criteria to ensure integration 15. Lack of environmentally sound materials, processes, and technologies 16. Government short-term funding cycles that negatively impact technology development and deployment 17. Inadequacy of current information technology to support future manufacturing needs. 18. U.S. defense and commercial sector investments in R&D and capital that are considerably less than those of their foreign country counterparts 19. Shortage of adequately educated and trained people 20. Inadequate understanding and knowledge of practical engineering versus science 21. Traditional bases for corporate decisions about technology that are less effective given the rapid pace of change in product and production technology 22. Lean production that has created a threshold for product quality and cost that no producer can realistically meet Weak support for process technology development, product flexibility, and mechanisms and methods to increase supply chain flexibility. 2.2 Enablers Twelve enablers have been identified as methods to overcoming the barriers mentioned above. This list of enablers is not comprehensive but only illustrative of what is currently being done in certain industrial sectors to overcome the barriers that prevent the full imperative from being achieved. They were compiled from the existing Roadmaps document2 and from other sources. The enablers are grouped into three general categories: Process and Equipment Understanding: A fundamental understanding of relevant manufacturing processes must be maintained within each company. This enables process optimization, improvement, and replacement activities, when appropriate, as well as enhancements to overall manufacturing effectiveness. No competent decisions can be made without understanding the basic processes that are involved in an operation. The need to understand manufacturing processes further implies a clear knowledge of both discrete operations and the characterization methods used to determine the cause-and-effect relationships that define various levels of performance. Key enablers for understanding manufacturing processes and equipment are: 1. 2. 3. 4. Development of methods for understanding manufacturing processes Benchmarking of manufacturing processes on a global scale Fundamental research and its transfer Modeling and simulation of processes and equipment.
Digest of Current U.S. Industry Roadmaps, NGM Program, July 1996.
Process and Equipment Acquisition and Implementation: Successful companies assure that they understand, and have access to, current and advanced manufacturing technologies, processes, equipment, and communications technologies. This does not necessarily require continuous efforts to maintain state-ofthe-art operations or advanced research and design capabilities, since this may not be a cost-effective tactic. However, it is necessary to maintain a mechanism for understanding and acquiring the processes and equipment that are critical to competing in an evolving marketplace. This can be accomplished through internal development, partnership activities, or purchase. Key enablers for the acquisition and implementation of processes and equipment are: 5. 6. 7. 8. Development of equipment standards Development of intelligent closed-loop processes using advanced sensors and controls Information-sharing of processes and equipment throughout the enterprise/supply chain Predictive maintenance.
Enabling Technologies: It is crucial for the NGM Company to continuously evaluate the need to implement new processes and equipment technologies. It is necessary to evaluate the potential impact of available technologies and to determine the effects of improvements that are being implemented by competitors. Common market drivers that must be considered include costs, quality, and regulatory requirements. Key enabling technologies for the NGM processes and equipment are 9. Flexible, modular and in-line cellular processes and equipment 10. High-speed machining processes 11. Macro-, micro-, and nano- technologies 12. Rapid prototyping. 2.3 Metrics Implementing any of the enablers presents a challenge in balancing investment needs against near-term requirements, and in evaluating the results of such efforts. Metrics that can be applied to the topics discussed in Section 2.2 include The range of workpieces that can be produced by a single process or equipment set The number of discrete process steps required to produce a product Product throughput or daily production rate Waste generation or fraction of raw materials included in final product Percentage of product that meets or exceeds specification Energy usage required for making product Tradeoff analysis among capital, operations, and total life-cycle costs for manufacturing processes Interoperability and modularity of process equipment Cycle time for process update or replacement Technology generations between that currently used in manufacturing operations and what is commercially available Mean time between failures Tooling requirements per machine tool or work cell.
2.4 Action Plans Based on the enablers , a series of action plans have been developed. These action plans do not implement every concept discussed herein, but are broad-based development activities that, when fully developed and implemented, will allow process and equipment information to be shared rapidly across an NGM extended enterprise. The action plans are summarized as follows: Process Design Environment (PDE): Development of an environment to be used by the process engineering team to gather knowledge about manufacturing processes and create optimized process plans. Intelligent Processes and Equipment (IP&E): Development of hardware and software to implement optimized process configurations on the shop floor using modular machine tools and modern computer control equipment. Manufacturing Collaborative Environment (MCE): Development of information services needed to operate in a collaborative extended enterprise. Figure 2.4-1 shows the concept of a company that is electronically connected to its partners in an extended enterprise. Corporate design efforts are conducted on high-performance product design workstations that model many product features and optional product configurations, including manufacturing, environmental, and disposal/reuse issues. The electronic product description is shared throughout the product design phase with the manufacturing process design team. The process design team uses similar modern workstations to consider optional manufacturing unit processes for each component as well as availability of existing processing equipment, either within the NGM Company or within the extended enterprise.
Textile Cell Assembly Cell Rapid Prototyping Cell
Electronic Libraries
intranet (local area network)
Cell Controller
Cell Controller
Cell Controller
Cell Controller
Cell Controller
Cell Controller
Product Design Workstation
Process Design Workstation
Factory Floor Control Workstation
Machining Cell
Chemical Process Cell
Microfab Cell
Engineering Building Information Network

Electronic Libraries
Factory Building
Cell Controller
Process Modeling Software Vendor
Parallel Computer Timesharing
Process Design Workstation Machining Cell
CAD/CAM Software Vendor
Vendor Electronic Libraries
Suppliers Building
Extended Enterprise
Figure 2.4-1. Integration of MP&E Action Plans in an Extended Enterprise
Standardized product and process data files allow mining (searching) partner archive files to locate historical process plans of similar components, thereby avoiding needless replanning steps. Complex processing steps requiring many unit processes may be performed on modular processing equipment that would be assembled from standardized components owned by the company or the extended enterprise or rented from equipment vendors. In this way a new machine tool or specialized processing equipment can be configured for the duration of a production run and then disassembled, with its component parts to be used for future production activities. Standardized and fully characterized processing components would allow near-autonomous process planning to be conducted and would assure with high confidence that the assembled processing equipment will perform as expected when making the first component. Inexpensive computer modeling of manufacturing processes will become routine and will allow small-lot-size production runs (even lot sizes of 1 item) with high confidence of success. Vendors outside of the extended enterprise may be used to supply standardized software, process models, or mainframe computing services. These services would be acquired on a direct procurement basis and may or may not require the vendor to join the extended enterprise. Joining the extended enterprise would allow the vendor to participate in the product/process development effort and might allow the vendor to customize his product/service to more exactly fit the needs of the extended enterprise. The NGM factory floor will consist of a heterogeneous collection of processing equipment that could be owned by the company or the extended enterprise, rented or borrowed, but that possesses a standardized electronic description so that it can be considered for use by the factory modeling software. The evolution of open-architecture controllers (OACs) will allow their reconfiguration for the control of unique process steps and small-lot-size production. Standardization of both hardware and software interfaces on OACs will allow controllers to be reused easily and upgraded in an incremental fashion, which will nearly preclude their becoming outdated. The intent of these highly versatile and information driven-hardware and software components is to allow the product/process design effort to be conducted in as unconstrained a manner as possible. Artificial constraints because of past investments in capital equipment and the inconvenience of using equipment in partner/vendor facilities create unnecessary barriers to achieving optimal, profitable, and cost-effective designs.
3.0 RELATIONSHIPS TO NGM ATTRIBUTES 3.1 Benefits of the Imperative Table 3.1-1 maps the relationship between the six NGM attributes and the three categories of enablers listed in Section 2.2. The full description of each enabler follows in Section 4, whereas this table summarizes how the enablers map into and contribute toward the achievement of the NGM Company attributes. Each attribute is described briefly after the table. Table 3.1-1. Relationship Between NGM Attributes and MP&E Enablers
NGM Attributes Customer Responsiveness Global Market Responsiveness Process & Equipment Understanding Rapid evaluation of processes & equipment to allow optimal choice to meet customer needs Deep knowledge of foreign P&E technologies allows more rapid response to foreign opportunities & challenges Continuously evolving core competencies are supported by a basic understanding of P&E Development of broad technical backgrounds allows employees to transition between P&E as customer demands change Teaming allows a supplier or customer to share P&E knowledge within an NGM enterprise A fundamental understanding of P&E allows appropriate & timely plant & equipment adaptation to meet customer needs Process & Equipment Acquisition & Implementation Acquisition & maintenance of P&E that will provide product agility Enabling Technologies
Provide ability to invent new solutions where none currently exist Development of P&E knowledge that Much fundamental P&E will allow informed comparison knowledge is more advanced in between foreign & domestic equipment foreign markets Information sharing in extended enterprise to allow rapid adaptation to cultural differences between partners. Avoids not invented here syndrome Educated employees are in touch with new technologies & comfortable in taking joint responsibility with suppliers for successful implementation Turnkey technologies only work in the context of effective acquirer-supplier teams Selection of appropriate P&E allows the creation of a rapidly responding physical plant or extended enterprise Looking for jewels in the knowledge base
Responsive Practices & Cultures
Bring the research ethic to the factory floor
Teaming as a Core Competency Physical Plant & Equipment Responsiveness
New technologies are best developed by researcher-end user teams Fundamental knowledge of new process technologies is essential to configure a responsive physical plant
The definitions of the NGM attributes are listed here for reference: Customer Responsiveness The NGM Company will work with and in anticipation of customers to supply integrated products and services that fit evolving life-cycle requirements of function, cost, and timeliness. Physical Plant and Equipment Responsiveness the NGM Company will employ an ever-growing knowledge base of manufacturing science to implement reconfigurable, scaleable, cost-effective manufacturing processes, equipment, and plants that adapt rapidly to specific production needs. Human Resource Responsiveness The entire workforce of the NGM Company will comprise highly capable and motivated knowledge workers who can work in a flexible work environment, with substantial independent decision-making. Global Market Responsiveness the NGM Company will develop its manufacturing strategy to anticipate and respond to a continuously changing global market, with operations and infrastructure tailored to local requirements. Teaming as a Core Competency the NGM Company will team within and outside the company to acquire and focus knowledge and capabilities to develop, deliver, and support their products and services. Responsive Practices and Cultures the NGM Company will continuously evolve core competencies, organizational structure, culture, and business practices, enabling it to anticipate and respond rapidly to changing customer demands.
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3.2 Relationship of Enablers to Barriers Table 3.2-1 maps the relationship between the MP&E barriers and enablers previously discussed. The full description of each of the enablers follows in Section 4, whereas this table summarizes how the enablers map into and contribute toward overcoming the 23 MP&E barriers. The enabler number corresponds to the list in Section 2.2. Table 3.2-1. Relationship Between MP&E Barriers and Enablers Barriers
1 1. Lack of fundamental understanding of the behavior of manufacturing processes & equipment 2. Lack of communication among product & process designers & machine tool builders 3. Failure to recognize the need to understand processes 4. Lack of understanding of which process & equipment capabilities determine critical product characteristics 5. Lack of knowledge of available methods for characterizing processes & equipment 6. Lack of knowledge of process control technology 7. Unavailability of sensors that provide information to characterize specific manufacturing operations 8. Shortage & limited applicability of existing process modeling & simulation tools 9. Limited awareness of or reluctance to use knowledge & development work from outside of the immediate organization 10. Inability to analyze trade-offs involving processes, equipment, life-cycles, & capital investments 11. Purchase of past-generation manufacturing equipment that restricts the incorporation of future product & process advancements 12. Corporate inertia arising from significant prior investments in old processes & equipment 13. Difficulty in justifying new equipment or process R&D 14. An insufficient number of international standards 15. Lack of environmentally sound materials, processes & technologies 16. Government short-term funding cycles have negative impact on technology development & deployment 17. Current information technology is inadequate to support future manufacturing needs 18. Defense & commercial sectors are investing considerably less in R&D than their foreign counterparts 19. Shortage of adequately educated & trained people 20. Inadequate understanding & knowledge of practical engineering versus science 21. Traditional bases for corporate decisions about technology are less effective with the rapid pace of change in product & production technology 22. Lean production that has created a standard for product quality & cost that no producer can realistically meet 23. Weak support for process technology development, product flexibility, & mechanism/methods to increase supply chain flexibility 2 3 4 5
Enablers
6 7 8 9 10 11 12
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4.0 ENABLERS FOR OVERCOMING BARRIERS The main body of this Imperative report is a detailed description of the 12 enablers that some companies are implementing to overcome the barriers preventing a company from achieving all of the NGM Attributes. Each enabler is defined, and then examples of state-of-the-art or existing best practices are given. This is followed by a description of what might be done in the future to advance the existing technology or to more fully demonstrate its capabilities. Because of the large number of enablers, this section is divided into three subsections Process and Equipment Understanding Process and Equipment Acquisition and Implementation Enabling Technologies. 4.1 Process and Equipment Understanding 4.1.1 Development of Methods for Understanding Manufacturing Processes Discrete manufacturing operations (such as turning, milling, grinding, and the individual unit processes3 that occur within these operations) exhibit cause-and-effect relationships that determine the quality, cost, and customer-responsiveness characteristics of finished products. Understanding these relationships allows a company to produce high-quality products predictably and to enhance its position in the marketplace. This process characterization activity includes: An accurate assessment of the output from the unit manufacturing operations The identification and measurement of critical process parameters The development or acquisition and use of a model that reliably defines the process-quality interrelationships. Detailed process knowledge provides valuable insights into process behavior and permits reliable decisions to be made based on trade-offs involving: Processes, equipment, life-cycles, and capital investments Ability to evaluate process impacts on flexible operations The assessment of equipment or process development options. This knowledge also permits a company to meet changing customer needs by making the appropriate alterations to its manufacturing processes and equipment. Companies that depend on traditional manufacturing methods and limited or poorly organized analysis of production data often find it difficult to remain competitive in a marketplace that demands increased product sophistication and quality. Many times the difficulty in meeting new market challenges lies not with the personnel or equipment but with the lack of useful manufacturing process knowledge. In other instances, new technologies may be needed but this determination cannot be made without a thorough understanding of a particular manufacturing operation. For example, a manufacturer of turned components with hemispherical profiles wanted to improve the accuracy of the workpiece contours. The existing part contour accuracy was approximately 0.002 inch (50 m), and one proposed solution was to purchase new machine tools. While characterizing the capabilities of the existing machines, however, it was discovered that the machines had a tool-path accuracy of approximately 0.0002 inch (5 m) under ideal conditions. The critical question was what was the difference between the actual machining operation and the ideal test conditions. Further testing identified cutting-tool wear as the major source of process error. In this situation, acquiring a machine tool capable of producing a perfect tool
3
Unit Manufacturing Processes, National Academy Press, Washington, DC, 1995.
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path would not have made a significant improvement in contour quality; instead a system was developed that characterized the tool form prior to the last machining pass and automatically compensated for the errors in cutter shape because of wear. State of the Art/Best Practice/Pilots Traditional methods for understanding manufacturing processes and equipment have been focused largely on statistical techniques, such as control charts. These powerful techniques plot parameters such as production lot averages and variations for specific workpiece features and provide a good high-level overview of a process. Much of this data, however, is provided by measurements that are obtained after the product is completed and has relatively little value for real-time process control. In addition, because these measurements are deliberately directed toward production lot characterization, the knowledge about what happens to an individual workpiece is unavailable, and small lot sizes make the interpretation of results less reliable or impossible. In one situation, a large manufacturer of off-road equipment had an ongoing 2% camshaft scrap problem. This relatively minor but nagging problem was a topic of concern for more than 5 years before the cause was understood. The difficulty was caused by a process plan that allowed the operator to increase the feed rate on the first part in each batch until grinder burn occurred. At this point, the operator reduced the in-feed to a safe level and ran the rest of the batch. Since one part per batch of 50 parts was automatically sacrificed, the scrap rate was 2%. In another case, a component supplier to a large locomotive manufacturer had problems producing consistent properties in heat-treated products. The difficulty was eventually traced to variability in the sand quench process that followed the heat-treating operation. Enhancing the uniformity of the sand covering resulted in improved product quality. In both of these cases, the solution to the problem was not difficult to implement. The only challenge was in understanding the process details as opposed to the average characteristics of the production lot. Fortunately, by listening to the people on the shop floor, it was possible to understand what was happening to the individual workpieces, and appropriate actions were taken to resolve the problems. Rarely are todays successful manufacturing decisions made without reliable models that accurately predict the consequences of process modifications. This analysis tactic is well understood and often is used to advantage in the scientific community, but it is less frequently applied in the seemingly erratic world of the production shop floor. Nevertheless, actions such as procuring a new cutting tool instead of a new machine tool must be supported by a comprehensive understanding of the unit operations. Then an intelligent assessment can be made of the most appropriate action for the specific process requirements. A good example of the successful application of process models is a recent Cooperative Research and Development Agreement between a U.S. Department of Energy (DOE) laboratory and a machine-tool builder. A machining centers performance was studied in a non-uniform thermal environment and unwanted geometric perturbations were mapped to specific machine components. This knowledge led to machine modifications that minimized the machine geometry errors associated with variations in temperature. The result was accuracy enhancements that could be implemented on an existing machine for an affordable price. These machine modifications were subsequently implemented in a machining center at an aerospace manufacturers facility to solve a critical part-manufacturing challenge. Previously, the job had required the use of a very expensive and slow boring mill operation. Switching to the modified machining center produced outstanding results. Not only did they achieve the anticipated accuracy improvement, but a family of parts was run in eight hours that would have taken 40 hours on the boring mill. As these examples demonstrate, the methodologies needed to characterize most manufacturing operations are easily accessible today, and the systematic application of process sensors and models provides the ability to monitor the quality of many manufacturing operations in near-real time.4 Of course, in some instances the sensors and/or models needed to perform in-process or even process-intermittent measurements are not readily available. Examples include the exact positional relationship between a workpiece and the tip of the cut4
In-Process Quality Control for Manufacturing, Marcel Dekker Inc., 1989.
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ting tool, the temperature of a specific location in a high-temperature furnace, or the shape of a rapidly moving part. In these cases, a secondary parameter such as machine slide position, furnace element power consumption, or single feature size may be used to infer the characteristic of interest. The barriers to the successful use of these characterization techniques are largely related to the need for special sensors, specific application models, and improved education in factories and universities on the benefits of thoroughly understanding the cause-and-effect relationships inherent in manufacturing processes. Emerging state-of-the-art extensions of current best practices include data analysis techniques such as chaos theory and neural networks that provide process models, and new machine-geometry error characterization systems that can map a machines performance completely in a single day. The High Throughput and Reliability (HiTaR) project, conducted under the Intelligent Closed Loop Processing area of the Technologies Enabling Agile Manufacturing (TEAM)5 program, has the goal of applying advanced characterization and control techniques to large machining centers. The objective of HiTaR is to double the machining centers throughput while improving the overall quality of the workpieces. A combination of predictive maintenance and advanced machine tool control techniques are expected to be needed to satisfy the project goals. Future Stretch Goals Stretch goals include the ability to characterize completely and control manufacturing processes from a total manufacturing cost standpoint. In some cases, this will mean that no defective products are ever produced, and the workpieces will not require post-process inspection. 4.1.2 Benchmarking of Manufacturing Processes on a Global Scale In order to gain a competitive advantage, world class manufacturers continuously update their knowledge base by comparing their equipment and processes to the worlds best, through individual and cooperative benchmarking. Internal information is not sufficient to determine how much process improvement is possible. To prioritize the use of scarce resources to develop enhancements, a manufacturer must know how high the bar is set in every area of strategic importance. Machines and processes with which someone has done much better will offer a higher potential for improvement. Benchmarking should be performed at all levels within the manufacturing process. These areas should include individual processes and equipment; process design; process and equipment modeling and simulation methodologies and tools; and process solution optimization strategies. For example, one manufacturer might plan to devote extensive capital and engineering resources to improve a radiator manufacturing process and save 5% of product cost, when an overseas competitor has redesigned the product to eliminate this process and save 10%. State of the Art/Best Practice/Pilots One electronics manufacturing center considers benchmarking best industry practices to be the basis for continuous improvement. A pilot benchmarking database was established based on more than 40 visits to other sites to facilitate the coordination of benchmarking information. In its initial benchmarking efforts, the manufacturing center found redundant, unfocused, and sometimes missing trip reports. Improvement in company benchmarking was needed to maximize the benefit of existing efforts and coordinate internal efforts to ensure conformance with established benchmarking metrics. A Benchmarking Coordination Team was established to train benchmarking teams, to coordinate and focus multiple efforts, submit newsletter articles, train database users, and serve as the benchmarking champion to a business unit. The team found that a dedicated focal point is needed; that the database must be easy to use and maintain; and that benchmarking personnel are to provide a service, not act as auditors. The benefits include eliminating redundant efforts, providing a quick review of previous efforts, and providing secondary assistance inhouse from the associates who conducted the benchmarking effort.
5
TEAM is a joint Department of Energy National Laboratories project, executed with partners from U.S. industry. Internet home page http://cewww.eng.ornl.gov/team/home.html.
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Future Stretch Goals Americans are at a disadvantage in worldwide benchmarking because of language barriers. Trade associations, professional societies and manufacturing interest groups should accelerate their efforts to benchmark overseas. Metrics need to be developed that more clearly measure the improvement of processes and equipment as an aid to benchmarking the manufacturing process framework and specific processes and equipment combinations within the framework. Also, automated benchmark measurement systems need to be developed for continuous evaluation of process framework performance against benchmark criteria. 4.1.3 Fundamental Research and Its Transfer Todays business environment is characterized by increased competition, a shrinking resource base, a need for developing better products at reduced cost, and a reduced time to market. To address this challenge, companies must change fundamentally the manufacturing process for the equipment used to manufacture parts. This type of change is easier in organizations that have either a highly developed research unit or that can get research from dedicated research organizations. Few organizations, however, can afford their own research unit. Today, many roadblocks to implementing new technologies remain after the research is complete. In fact, a major problem with evaluating the success rate of research and technology transfer is that measurements of success have not been well-defined. State of the Art/Best Practice/Pilots Traditionally, the bulk of manufacturing process research has been conducted in universities, federal research laboratories, and national defense institutions. The subject and form of the research has depended upon the interests of the principal investigator, which often do not coincide with industrial needs. Research results are largely discussed among academic peers, and only a very small fraction of the research gets acted upon. The slow diffusion of basic and applied research developed without consideration for the specific needs of industry is analogous to water flowing from a central reservoir to a leaky water fountain. This technology diffusion process (Figure 4.1.3-1) can take a very long time. In addition, this research only represents a small portion of the overall industrial need.
Basic & Applied R&D Aimed at Manufacturing
Pool of Research That Addresses Industrial Needs
Pool of Research That Addresses Industrial Needs
Research Appropriate for Implementation into Industrial Facility
Research Appropriate for Implementation into Industrial Facility
Figure 4.1.3-1. Diffusion of Basic and Applied Research Today, various government agencies and consortia are attempting to ensure that the research has a practical end result. Publicly sponsored research proposals have collaborative partners in industry who are directly contributing to the research in terms of either goods and materials, by providing personnel to work on the project, and/or directly funding part of the project. In addition, several government organizations are funding pre-competitive applied research that can be licensed or publicly acquired through various symposia, workshops, and demonstrations. These approaches have achieved varying degrees of success. The researchers still have private agendas, and industry has assumed the role of reviewing and approving instead of actively directing and leading the projects. The latest development in the transfer of basic and applied research to industry is the use of organizations (or consultants) that provide turnkey solutions to various manufacturing problems. First, these organizations work with a manufacturing enterprise to understand their current practice. Then, based on their in-house expertise, various modifications are suggested to the current practices. In addition, longer-term research issues are identified and provided to more academically-based research organizations. Research findings are later implemented as changes to the existing best manufacturing processes. Figure 4.1.3-2 shows the movement of
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industrial problem statements through a three-party organization that works with industry and academia to frame research issues in generic terms and provide broadly applicable solutions to multiple companies.
Problems Turnkey Solution Provider Fundamental Research Needs Universities, Government Laboratories, Other Research Centers Enabling Technologies
Industry
Solutions
Figure 4.1.3-2. Movement of Industrial Problems Through a Third-Party Organization Future Stretch Goals There are several perspectives that must be realized before technology transfer can be made more effective. These are: Process: Technology transfer is a concurrent process, not a linear one, with numerous feedback loops. People: Technology transfer is a continuous process of human interactions , not discrete deliverables (papers, patents, and other tangible items). Time: Technology transfer is a real-time process that occurs at the source, not a sequential process from A to Z. Organization: Technology transfer requires a new management philosophy and tools . It cannot be managed hierarchically from the top down. Push/Pull: Technology transfer is a complementary push/pull process of mediating laboratory capabilities to match market needs, not just a push phenomena of ideas emanating from the laboratory. A greater emphasis must be placed on industrial identification of, and participation in, projects. To increase the value of this partnership, a process must be developed that requires industry to provide the topic and direction for project research. Funding should be directed to those projects in which industry takes a meaningful role. Traditionally, the driving force behind much manufacturing technologies research has been pushed by the Department of Defense (DoD), the National Aeronautics and Space Administration (NASA), other publicly funded initiatives, or academia. The focus has been on the development of dramatic breakthroughs designed to support national defense initiatives ( e.g., Star Wars technologies). Few research initiatives have originated from grass roots end users of production equipment, or even from the traditional machine tool industry. Researchers need to understand the needs of the industry better and then focus the research on those topics while keeping the industrial partners involved at every stage of the research process. Certainly several organizations have had success in transferring publicly funded research technology into the private sector. Much of this new technology was funded originally in the 1960s, 1970s, and 1980s, when the Cold War and generous government funding launched numerous pure research projects. The process of transferring the fallout of this massive research effort to private manufacturing, while beneficial, would not be considered economically efficient (or even feasible!) in the austere 1990s. Indeed, there is a new global paradigm today that dictates a more focused approach to the development of new manufacturing technologies in the next 5 to 15 years. The concept of Regional Evaluation Centers (RECs) would allow for many end users and machine tool builders to see newly emerging manufacturing technologies first-hand.. Similar to the regional teaching factory concept, large and small manufacturers could more readily (and less expensively) travel to see the latest manufacturing research developments in their own back yards.
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The opportunity to obtain immediate feedback on the potential application of new technology could be realized by surveying participants. An evaluation of the potential payback for these efforts could redirect scarce research funding to projects that address short- and long-term commercial applications. Funding of regional Research Evaluation Centers could be shared by federal and state agencies, motivated to support local economic development. Leading edge (pure) research activities could feed the REC sites with innovative manufacturing technologies as part of a continuous loop of launch, redirect, develop, and deploy. The transfer of research results from dedicated research organizations to end users has proven to be inefficient, due to both poor focus of the research goals and reluctance to accept research results. The ultimate solution is to infuse the culture of research into the manufacturing facilities where the research problems and data are generated. This will involve creating doctoral education programs that prepares engineers to work on the factory floor and a reward structure that welcomes and values them. Finally, the use of modern computer networks (Internet) and advanced graphics/animation could provide a virtual experience for those evaluating demonstrations of new technology. 4.1.4 Modeling and Simulation of Processes and Equipment Computer modeling (the rendering of hardware, facilities, or processes into computer-based images and data) and simulation (the use of computer calculations to describe the behavior and response of real-world processes under various environmental influences such as load, temperature change, etc.) are becoming essential to manufacturing and production. Modeling and simulation can provide the manufacturability input and validation during design activities being conducted in an Integrated Product/Process Development (IPPD) environment. Early implementation of modeling and simulation capabilities in the product-realization cycle can result in design for manufacturability, cost, and continuous product or process improvement and can enable responsiveness to changing customer requirements. Modeling and simulation can be applied to manufacturing issues ranging from the dynamic loads resulting from machine-tool chatter to the flow of material through a complex production line, and from preparation of a CAD file for part fabrication to a full-scale virtual manufacturing simulation. The benefits of modeling and simulation include: Gaining a detailed understanding of a process or event Providing the means for assessing design or process alternatives Product development cost and time savings resulting from the elimination of real-world trial and error procedures Early optimization and validation of designs for cost targets, manufacturability, and resource utilization Virtual prototyping to eliminate the need for costly hardware Elimination or significant reduction of product testing. The NGM Company will apply modeling and simulation to their processes continually to realize time and cost savings, gain understanding of their products and processes, and communicate competence and capability to their customers. Traditionally, many companies understand the value of modeling and simulation but do not apply these technologies because of: Cultural constraints Limited R&D funds Conservative product or process introduction practices Limited access to modeling and simulation resources Inability to invest in the generation of data bases and the validation of techniques Lack of knowledgeable or trained staff Lack of real-world training opportunities.
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Often, modeling and simulation are introduced into the development cycle only after problems have developed and a need for deeper understanding of the process or product behavior is established. At this point, considerable time and resources have been consumed in bringing the development cycle to a problemgenerated impasse. The solution is often found through modeling and simulation and could possibly have been found earlier in the cycle or have been avoided completely through earlier or more timely application of modeling and simulation. These reactive approaches are time-consuming and costly, and they tend to address a point solution in which all efforts are focused on solving the immediate problem. Best practices suggest that the NGM Company insert modeling and simulation of products and processes at an earlier stage in product design. State of the Art/Best Practice/Pilots Most major forging companies have adopted linear and nonlinear finite-element methods for the simulation of metalworking operations to aid in the design and validation of forging die designs. Forging geometry, designed by applying long-established rules, are simulated to test forge-ability performance. The die designer can iterate the evolving geometry to minimize input of raw material, to achieve a specific microstructure, or to arrive at some other target. The verification of the forging process can be shared with the part designer during IPPD, assuring cost and producibility goals are met before the part design is complete. In most cases, the forging dies are machined and the first forging is acceptable for production. In addition, the casting industry is acquiring a similar capability with FASTCAST,6 an investment casting software system that includes prediction of material flow through molds (process modeling), optimum placement of gates and risers (equipment design), and prediction of cooling schedules to minimize residual stresses during solidification (process modeling). These generic examples relate successful implementation of modeling and simulation methods that are broadly applied but that also required significant government and industry investment to implement. Government funding was provided to perfect the performance of software in the simulation of metalworking processes. Industry validation and database development required investment and application in parallel to normal production operations prior to implementation. Future Stretch Goals The application of modeling and simulation to advanced manufacturing processes and equipment has advanced significantly and will become increasingly important and widespread as hardware and software capabilities improve and confidence in their use increases. Current capabilities, impressive as they are, tend to be point solutions to specific process modeling or equipment design objectives and are often electronically disconnected from the product-realization software stream. Increasing computational speed and power will expand simulation applications. The use of parallel processing, distributed computing, or other emerging high-performance computing methods will enable larger, complex 3-D simulation problems to be accomplished routinely. Technologies to ensure synchronized multiplatform computing will assure rapid turn-around of large problems. The role of animation in expanding the interpretive ability of the simulation user will be an important link in the transformation of data into knowledge. Animation and visualization make simulation results accessible to and believable for relatively unsophisticated users and contribute to the widespread acceptance and utilization of simulation tools. Continued development of animation as part of simulation post-processing depends on the progression of high-performance computing technologies. Because of the high R&D and applied technology content of computational codes, there is an ideal match for cooperative efforts with universities (where fundamental principals are established), national laboratories (where fundamentals are transformed into application-based software tools), and private industry (where software tools can be tested, benchmarked, and marketed). A cooperative national effort is desirable, and the vision of a broad commercial application program should be preserved.
Software resulting from a consortium of government laboratories and U.S. industry.
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Future needs will require modeling and simulation capabilities to be highly integrated into the product realization process. The translators between applications will be eliminated as intelligent encapsulation methods are developed. Integration software will be developed that is compatible with iterative process design or process feedback for manufacturability assessment or optimization, suitable for use by non-modeling specialists, highly modular for custom application, fully coupled across discipline boundaries when needed (i.e., electrothermo-mechanical coupling), and sufficiently general to address the complexities of 3-D and nonlinear behavior. The inclusion of process analysis and simulation into an optimization environment where design analysis and manufacturing/cost analysis trade-offs can be performed and optimized will support rules-based design capability, greatly shrinking the time needed for product design. Simulation methods that are compatible with system-level optimization will enhance the product design environment. Achievement of this high-level integration and application flexibility will bring the technical community closer to true virtual manufacturing, where the engineer can perform desired product development assessments quickly, inexpensively, and with complete confidence. Examples of stretch goals for modeling and simulation of processes and equipment would include: Computationally-driven materials development where existing materials development practices are radically changed by the ability to model and simulate vast combinations of elemental and process variables to discover engineered material systems tailored for specific applications Process mapping of phenomena to reveal both optimum (stable) processing parameter regimes and regimes that satisfy failure criteria will allow simulation to verify stable process conditions that ensure robustness Model-based process control, wherein the knowledge of localized conditions within a part being processed (defined from simulation) is used adaptively by an intelligent control device to vary process parameters in order to maximize quality and minimize time Enterprise modeling and simulation that steps above factory-floor simulation to include the interacting functional entities (internal and external) that comprise the total enterprise. Managers make strategic decisions using product flow, resource availability, business drivers, and product insertion opportunities. 4.2 Process and Equipment Acquisition and Implementation 4.2.1 Development of Equipment Standards Equipment Standards is defined as a machine tool industry design standard for commonly used machine bases, power units, tooling, material conveyors, and fixturing. The use of common footprint dimensions, mounting hole patterns, standardized fasteners, interchangeable tooling, compatible controls hook-ups, and standardized power transmission devices addresses: The high cost of procuring and servicing production equipment Lead-time requirements for fixturing and tooling change-over New equipment installation lead-time The low residual value of obsolete proprietary equipment designs.
These standards create opportunities to reduce service and spare part costs, competitive pricing, rapid tooling change-over, plug-and-play workstation units, and greater equipment residual value. The means by which standardization barriers are addressed include: More widespread implementation of long-term partnering of selected machine tool suppliers and customers Use of engineering design standards within the industry Virtual corporations for specific tooling programs Development of industry standard flexible and modular processes and equipment.
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State of the Art/Best Practice/Pilots The European DIN standard has been employed in the design of fixture and pallet base footprints for some time by machining system designers/builders, and the HKS-63 [note: see p. 32 and HSK-63. Are these the same thing? If so, this one needs to be corrected and the footnote belongs here.]tooling specification has been adopted as a standard for high-speed spindle applications. In 1995, the National Center for Manufacturing Sciences (NCMS) followed up an automotive sector initiative to develop an Intelligent Work Station standard for the machine tool industry. U.S. machine tool builders participated in a series of workshops to develop a standard workstation module that could be constructed readily by a number of qualified original equipment manufacturer (OEM) equipment builders. This initiative, however, is currently on hold. Some companies have made a corporate commitment to standardize a variety of automation devices that have wide application in a number of discrete manufacturing processes such as the use of pick-and-place and indexing units that are deployed worldwide and are used in a number of diverse applications. One example is Hondas use of the same indexing unit to drive a chain conveyor in heat treat and an automatic handling device in subassembly. The obvious advantage to Honda is that the same maintenance people can be used to service such standard devices, and stocked spare parts requirements are kept to a minimum. Unit costs drop because new engineering is necessary only for the unique fixturing/tooling components required for a specific application. Future Stretch Goals At least two barriers stand in the way of the full development of production equipment standards. One is the proprietary nature of equipment designs. Specifically, how can equipment builders make money if designs become truly standard and commodity pricing prevails? Spare parts and servicing profit margins would be eroded in this situation. It is necessary to form a machine tool industry-based focus team, with the specific mission of resolving this critical issue. The machine tool industry must eventually recognize that its domestic customer base is under severe cost pressure, and that unless equipment suppliers are competitive, the domestic machine tool market will turn elsewhere for its source of production equipment. Another barrier is the lack of funding to sponsor the development of comprehensive equipment standards and the communications protocols for appropriate segments of this equipment. The U.S. machine tool industry is relatively small and undercapitalized.. Without assistance, it will be very difficult for the industry voluntarily to spend millions of dollars and many man-years in developing equipment standards that provide an uncertain return on investment. Although federal funding seems very unlikely in the austere decade of the 1990s, it is equally unrealistic to expect the machine tool industry to initiate full funding of such a project unless an industry-wide consortium can be established. A jointly funded Equipment Standards project should be supported by all parties that would benefit from the development of these standards. This suggests cofunding from the machine tool industry, equipment end users, and perhaps the Department of Defense. A host organization might be an existing NGM participant. 4.2.2 Development of Intelligent Closed-Loop Processes Industry requires manufacturing processes that are adaptable quickly, easily, and affordably to current and future production needs. Intelligent closed-loop processing (ICLP) techniques use process sensors to obtain real-time information that enhances a manufacturers ability to operate qualified in-control processes and deliver exceptional products. An important key to process agility and affordability is using ICLP technology to implement advanced, nontraditional controls. In most cases, todays traditional controls approach is inadequate to: Measure and actuate multiple process variables Use more process knowledge (especially more detailed process models) in process controls Incorporate more versatile and complex control strategies and algorithms in process controllers Communicate product/process information back to the enterprise.
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The process controller plays a central role in advanced, non-traditional controls. It is the physical entity that implements sensing and actuating, real-time process models, real-time strategies and algorithms, and product/process communication with the enterprise. The TEAM program identifies open-architecture controllers7 (OACs) as an enabling technology for enhancing U.S. manufacturing processes. The OAC, however, is just one of many components in the control system. Sensors, actuators, process models, and control algorithms also play equally important roles. The emphasis here is on the system aspects of the manufacturing process. When viewed as functional components, manufacturing process control systems have four major components as shown in Figure 4.2.2-1: process sensors, process actuators, process controllers, and the human operator. The process sensors supply the data that allows product and process variables to be monitored and controlled. The process actuators provide the means for interacting with the manufacturing process to control specified product and process parameters. The process controller ties together sensing and actuating, implements realtime process models, provides real-time control strategies and algorithms, and communicates product and process information to the enterprise. The human operator supervises and provides a broader knowledge base than is resident in the process controller. ICLP technologies must view manufacturing control systems from both a component-level and a systems-level. The success of ICLP technologies depends on more than providing the advanced, nontraditional control functionality. The manufacturing environment requires that ICLP technologies must also Be commercialized and maintained as part of a controls vendors product lines Be affordable, available in significant quantities, and available as off-the-shelf-technologies Be industrialized to work in a production environment Be easy to operate and provide standardized operator interfaces where possible Be easily and rapidly reconfigurable.
Materials Manufacturing Process Actual Part Attribute Characterize Part
Sensor Controller Sensor Module
Actuator
Part & Process Definition
Actuator Module Desired Part Attribute
Process Model Module Software Environment with API Definition
Part Attribute Correction
Figure 4.2.2-1. Intelligent Closed-Loop Processing Model
TEAM OAC - Application Programming Interfaces being developed by TEAM. Internet home page http://isd.cme.nist.gov/info/teamapi.
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State of the Art/Best Practice/Pilots This section describes some of the state-of-the-art or best practices exercised by U.S. industry in the intelligent closed-loop processing area. One company uses a laser inspection gauge to inspect turbine rotor shroud gaps. Tests have indicated overall wear performance clearly is sensitive to the total gap. The smaller the gap, the less wear; these gaps, therefore, are closely controlled by dimensional limits. The previous method was to measure this gap manually using feeler gauges. This method was slow and extremely sensitive to the individual skills of the inspector, and it produced reading variations. To accelerate this process and provide a more reliable inspection method, the company worked with an outside vendor with laser application and gauge design experience to help build an inspection gauge. An instrument was developed to inspect shroud gaps accurately and repeatedly to within 0.0005 inch (12 m). The new instrument has provided accurate and consistent measurements and a significant cost saving. Inspection time has been reduced from 30 minutes to 3 minutes per wheel. An aeronautical company has a well-established distributed numerical control (DNC) system which they have extended to accommodate uploading machine tool data. A machine monitoring unit also uploads analog and digital data from 15 to 20 sensors placed on each machine tool. These sensors provide readouts of vital signs such as coolant level, hydraulic pressure, and spindle temperatures. The data can be used to provide notice of conditions that warrant action, from routine maintenance to an immediate shutdown. OACs provide a way around the barriers and bottlenecks inherent in traditional manufacturing controllers and reduce costs by using solutions that are in the mainstream of computer hardware, software, and standards. Efforts are underway (TEAM in the U.S. and OSACA 8 in Europe and Japan) to open up controller interfaces by defining application programming interfaces (APIs) for the OAC: Industry-accepted OAC API: Several organizations (TEAM, OSACA, OSEC 9) are presently doing groundwork on OAC APIs. In late 1996, TEAM released a draft of an OAC API. Realistically, moving this draft and others into an industry-accepted, open standard, usable on common machine tools, will take 1 to 2 years. An interim OAC API standard, suitable for initial hardware and software development, may be available in late 1997. Commercialized, API-Compliant OACs: The availability of an OAC API standard determines how early a commercialized, API-compliant OAC may be available. Commercialized, fully API-compliant OACs are expected in early 1999. Third Party, API-Compliant OAC Modules: The third-party software modules initially will be written using the interim standard OAC APIs and may be available in early 1998. Fully API-compliant modules may be available in early 1999. The types of modules initially envisioned are Automatic servo-controller tuning Machine tool characterization (servo transfer functions, thermal, vibration, etc.) Vendor-supplied software for specialized sensors Links to commercial analysis packages to aid in-process model and process controls development. Future Stretch Goals In addition to advances in OACs, advances in the sensor and actuator technologies are needed to reach ICLPs goals. Future stretch goals for sensors and actuators are listed below. Additional sensors are needed to monitor processes so that more accurate models can be developed. Methods must be developed to determine what data to collect including: critical product parameters at different production steps, critical equipment parameters, and critical process variables. All of this data must be managed in a logical database and processed in real-time by on-board process and equipment models.
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OSACA - Open System Architecture for Controls within Automation Systems Internet home page http://www.isw.unistuttgart.de/projekte/osaca/english/workpack.htm 9 OSEC - Open System Environment for Controller Internet home page http://mlgw.mli.co.jp/ose.
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Sensors can be built into smart fixturing and tooling devices used to improve the manufacturing process; techniques and standards, however, need to be addressed. Specialized sensors could be used to control critical process parameters directly, e.g., a wall-thickness measuring sensor for machining components where wall thickness is more important than the absolute dimension of each surface. Special actuators can be combined with sensors and advanced controls to create inner control loops used to optimize process control, e.g., feeding servo motor errors into a high-speed piezoelectrically driven tool position servo to cancel these errors. 4.2.3 Information Sharing of Processes and Equipment Effective and open communication and sharing of information is essential to the survival of the NGM enterprise. This topic addresses: The lack of awareness of knowledge and development work within the individual company or elsewhere The lack of knowledge of customer needs The effect of short-term financial pressures that deter longer-term development. The means by which these barriers are addressed includes awareness of the need for more effective communication throughout the manufacturing life cycle and the development of partnering arrangements through open communication forums. Information sharing occurs at a number of levels with a broad range of possible content: within a working group or team; between teams or other organizational elements in a company; between partnering companies or potential partners; between a company or partnership and its suppliers and customers or potential suppliers and customers; within standards committees; and in business or technical organizations publications and conferences. Working relationships, the need for cooperation, and competitiveness issues largely determine the extent of openness and the content of the information exchanged. State of the Art/Best Practice/Pilots The following examples, taken from the Navys Best Manufacturing Practices 10 (BMP) database describe several aspects of information sharing as practiced by U.S. industry today: Digital Equipment Corporation (DEC) Westfield Information Management and Technology Department (IM&TD) supports all aspects of the companys worldwide business operations by providing and maintaining the systems and software to operate a seven-day, 24-hour computer environment. A broad array of systems including PCs, workstations, VAX, and UNIX-based systems are supported and fully integrated into the business. The Westfield site supports more than 600 users with 2000 accounts. Capabilities include electronic mail, linking all DEC employees worldwide and key external customers; CAD/CAM network linkages between the design groups; electronic data interchange with major suppliers; complete office and business systems; and more than 100 software packages. Formal contingency plans ensure uninterrupted systems support backed by a three-shift support staff. The Hamilton Standard Electronic Manufacturing Center (HSEMC) has identified many benefits from collaborating with other industrial and government partners in research and development efforts. These collaborative efforts minimize the risk of the single companys investment while leveraging the strengths within the electronics manufacturing industry. HSEMC teams with the National Center for Manufacturing Sciences (NCMS), Department of Commerce, Defense Advanced Research Project Agency, Department of Defense, internal United Technologies divisions, and other consortia. It has developed a discrete process plan flow chart delineating the steps involved to implement a technology insertion plan. Two examples of these successful external projects include the Chlorofluorocarbon (CFC) Elimination Program and the Lead-free Solder Project. In 1989, HSEMC emitted 325,000 pounds of CFCs. Through its collaboration with industry partners, HSEMC completed the elimination of CFCs from its manufacturing
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Navy - Best Manufacturing Practices Internet home page http://www.bmpcoe.org.
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processes at the end of 1994, 2 years ahead of the required legislation. The Lead-free Solder Project has proactively evaluated environmentally safe alternatives to lead-based solder alloys used in electrical/electronic interconnections. This 30-month program was based on developing a comprehensive matrix of solderability and properties, assessing these properties, and evaluating their ability to be used in todays manufacturing environment. Reaching outside the individual company in partnering increases the complexity of the communication process in that differing corporate cultures and goals may interfere with open sharing of information. Each partner must consider and be prepared to address the sharing of proprietary information that may be needed within a fully partnered project. Open trade and technical forums, including both popular and archival publications, conferences, and presentations, provide many opportunities for beneficial information sharing and frequently lead to interorganizational technology transfer or cooperative development efforts. In many instances, the need is not necessarily new technology but simply a means to locate and implement current technology. Future Stretch Goals In the past few years, the Internet has assumed a leading role in electronic communications, both public and private, and Internet home pages have provided individuals, companies, academic institutions, and other organizations with an instant worldwide visibility. Part of the rapid acceptance of web pages is that the underlying messages are computer platform independent thus allowing a single web page to be read by and the graphics displayed on any PC, Macintosh, or UNIX workstation. While its growth has been nothing short of phenomenal, its potential extends far into the future. The Internet will likely be an essential tool for successful companies. 4.2.4 Predictive Maintenance Predictive (rather than preventive) maintenance is the ability to estimate the probability of an equipment failure during some future time interval so that problems can be identified and maintenance can be performed before the failure occurs. Having this capability greatly increases the throughput of fabrication equipment by enabling selective down-time and avoiding overly conservative preventive maintenance schedules. Predictive maintenance significantly improves equipment reliability and availability and assures fabrication readiness to meet changing customer demands. Continuous improvement is derived from expanded predictive capabilities and their application to a growing inventory of equipment. Best manufacturing practices recommend that an accurate log of performance be kept for each piece of manufacturing equipment in order to anticipate common, recurring problems. Additionally, operators familiarity with normal equipment operation, equipment idiosyncrasies, and output quality serve as a possible qualitative source of early warning of impending problems. This strategy endorses regularly scheduled preventive maintenance and machine inspection to mitigate the possibility of catastrophic failure. These practices, however, rely on problem repeatability and operator attention and sensitivity to equipment. This approach can be unreliable because of its qualitative, subjective, sometimes conservative, and intermittent nature, and it cannot anticipate new problems. State of the Art/Best Practice/Pilots An effective approach is the use of sensors that detect anomalous parameters associated with machine operation and signal an indicator (light, alarm, etc.) when parameters exceed acceptable levels. Although this method is an improvement over data-based or reactive methods, it still suffers from an inability to anticipate problems before they happen and may not involve automatic equipment shut-down, thus requiring potentially unreliable and time-consuming operator observation of the indicator and manual intervention to shut down the equipment. An emerging extension to predictive maintenance involves the use of system reliability modeling in which unique software can identify the most probable failure modes of the system, not just of a component. Reliability modeling depends on the use of historic equipment performance data and real-time input from sensors placed at various critical locations on the equipment. It is capable of performing many calculations during equipment operation to continually update failure probability predictions. Recent advances in sensor tech24
nology, information utilization and exchange, system integration, and reliability modeling have opened the door for maintenance schedule optimization, elective equipment repair or improvement, and maximization of machine availability. Prototype systems are being developed and tested at a DOE national laboratory in cooperation with industrial partners for application to several machine tools. Future Stretch Goals Future extensions of this technology include the application of predictive maintenance and system reliability modeling to the complete equipment inventory of an NGM Company. Real-time output from the reliability modeling could be integrated into one process advisor that would recommend alternative equipment and material routing through the factory in anticipation of scheduling particular production machines for maintenance or repair. Such an advisor could be designed to provide information regarding reconfiguration scheduling and costs, production rate impact, operator requirements, and other metrics that demonstrate the functional and fiscal benefits of its implementation. 4.3 Enabling Technologies 4.3.1 Flexible, Modular, and In-line Cellular Processes and Equipment Flexible and modular equipment enables the rapid changeover of a specific manufacturing process to accommodate a variety (family) of different products and production volume rates. Flexible and modular equipment may employ open-architecture controls and industry standard mechanical designs. Flexible manufacturing equipment/processes are characterized by both speed and an ability to handle a variety of manufacturing processes, thus increasing the ability of a firm to anticipate and meet changing needs and customer requirements. It has its roots in the need to improve capital utilization rates and to support just-in-time (JIT) inventory objectives by reducing changeover time and expense. Product life cycle and projected volume rates need to be considered before committing to the flexible strategy; for high-volume requirements, dedicated production equipment may be more cost-effective. The trend to shorter product life cycles, reduced inventory levels, equipment recyclability, and higher equipment utilization rates, however, increasingly points to flexible cellular lines or stand-alone flexible machining centers. In-line manufacturing is defined as a straight-line transfer of in-process material through sequential and automated production operations, resulting in a continuous flow of finished product. Current examples include both dedicated and flexible transfer lines that feature multiple individual work stations, mounted on modular bases that employ either central or distributed process control systems. The benefits of inline/cellular manufacturing are improved quality control, reduced floor-space requirements, reduced work-inprogress inventory, and simplified material handling. State of the Art/Best Practice/Pilots One company has developed a flexible transfer line to produce automotive cylinder blocks. The line can produce any mix of the three cast-iron blocks. Each machine can process one type of block and then adjust automatically to accommodate different block heights, with no downtime for tool-changing or machine (fixturing) reconfiguration. For example, the controller adjusts fixturing and tool depth automatically to accommodate different block heights. Another company developed a machining system that employs a flip tool spindle/tool changer design to allow concurrent tool change on one spindle while a second spindle is cutting chips. On completion of an operation, the working spindle concurrently flipped (exchanged) location with the second spindle, now gripping the tool for the next operation. Chip-to-chip time in this design was under 3 seconds. Combined with quick-change fixturing, this process design allowed the customer to process a family of different small engine blocks in relatively small lot sizes. The need to reduce the cost of flexible equipment is paramount. Much work remains to be done in developing industry design standards that reduce new design costs, and servicing costs that allow for greater interchangeability of flexible modular units. The residual value of flexible modular units would also increase with more industry standardization. Specific standardization activities could be categorized in the areas of base dimensions, mounting-hole patterns/locations, fasteners, fixturing, tooling, and control hardware/software.
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Continued efforts at improving the accuracy and repeatability of flexible modular units address todays commonly demanded tolerance ranges of 0.0001 to 0.0002 inches (2.5 - 5 m). Tooling chatter, overheating of high-speed units, and excessive vibration are examples of opportunities for the improvement of flexible module performance. Another suggested activity centers around the cost-justification of flexible/modular equipment as opposed to proprietary designs and/or dedicated equipment. Methods or decision-making tools designed to take into consideration factors such as expected product life cycles, volume ramp-up rates, part quality requirements, equipment residual value, floor-space limitations, product mix, and servicing costs would be helpful in making the final decision to invest in flexible/modular equipment. Future Stretch Goals The vision of a truly agile machine stretches current manufacturing technologies in a number of respects. The ability to plug and play intelligent work cells rapidly into an in-line configuration will require standardization of cell footprints, quick disconnects for integrated utilities and controls, materials-handling automation, seamless software interfaces, and environmental control equipment. The fact is that the concept of universal intelligent work cells that are capable of being re-deployed into multiple in-line configurations is still a technological stretch. Further development of industry standards, with an emphasis on cost minimization, would be an interesting future goal. 4.3.2 High-Speed Machining High-speed machining allows an NGM Company to increase manufacturing throughput, increase equipment utilization, and maintain higher machining tolerances. Using spindles with capabilities of 10,000 to 40,000 rpm, high-speed machining overcomes conventional cutting speed limitations and achieves faster cycle time and improved machine utilization. New technologies such as linear motors, integral positioning scales, composite machine bases, ceramic spindle bearings, hydraulically-balanced spindle bearings, and advanced controls systems can be combined with higher spindle speeds to achieve enhanced productivity. Greater volumetric removal rates are achievable with a single high-speed machining center and provide a shorter return on capital investment and reduced floor space requirements. State of the Art/Best Practice/Pilots A machine tool company has recently developed a product with up to 60% improvement in cycle time over conventional machines. Tooling is supported with the industry-standard HSK-6311 spindle taper and a 36position tool changer. The machine also incorporates the marriage of linear motor technology with the highspeed spindle, because conventional servo-driven ball screws cannot feed ultra-high-speed spindles fast enough to realize their full machining potential. Combining advanced linear-motor technology, with its tremendous potential for slideway positioning speed and accuracy, with ultra-high-speed motorized spindles is truly a state-of-the-art extension. The combination of these two technologies when used in conjunction with nearnet-shaped components and advanced control/feedback systems will likely emerge as the standard machining system for the 21st Century. Another machine tool company has recently developed a system which uses linear motor technology to drive axis motions. Using a hollow-shank, short-taper tool holder, (with chuck retention fingers for better tool grip), they claim improved axial repeatability by a factor of 3 over conventional tool holders 0.01 mm under ideal conditions. Run-out is a third of high-accuracy steep-taper shanks (0.003 mm). Finally, the system demonstrates improved dynamic stiffness with simultaneous face and taper contact between the tool adapter and the spindle. Future Stretch Goals Spindle speeds of 40,000 to 50,000 rpm can cause tooling problems such as whipping with long tools. Merely preventing the tool from flying out of the tool holder is both a performance and safety concern. Further research needs to be done on the development of such technologies as shrink-fit tooling.
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HSK - Hauptabteilung fr die Sicherheit der Kernanlagen: http://www.hsk.psi.ch/.
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The field testing of new high-speed machine tools in actual production settings is essential to evaluate fully the long-term durability of linear motors and the ability to hold their original accuracy. Because of the high feed/speed rates of these machines, chip removal is a constant challenge. Further research on the development of reliable and cost-effective chip removal systems should be a priority. Finally, the ability of high-speed machines to process ferrous-based materials needs to be explored and developed further, because most high-speed applications have been with aluminum and nonferrous alloy parts. 4.3.3 Macro-, Micro-, and Nano- Technologies In the future, traditional macro-scale products (complete components or machines larger than a few millimeters) will be infringed upon by micro-machines, nano-machines, and very possibly, biological machines. These micro-machines will not be one-for-one replacements for their macro-world equivalents but will deliver the same functionality that is now performed in the macro-world. If an NGM Company fails to study this rapidly evolving technology carefully, its market share may be dramatically influenced because it will be constructing traditional macro-scale machines while competing with companies that have mastered the construction of significantly cheaper and more sophisticated micro-scale machines. A good example of this situation is the demise of the mechanical calculator companies after the introduction of the transistor and the integrated circuit. Burroughs Corp. (once the standard in calculator technology) no longer makes any mechanical calculators, including those with printers. It is imperative for NGM Companies to study the functions performed by their present products (e.g., telephones, calculators, computers, global-positioning systems, books, illumination devices, cameras, filmrecording devices, audio recording and playback devices, sensors, vision aids [glasses], clothing, writing devices, etc.) and to consider how these products could be displaced by more intelligent products and how they could be constructed using micro-manufacturing technologies that are currently evolving from the integrated circuit manufacturing industry. State of the Art/Best Practice/Pilots Prior to 1980 there were no mechanically constructed machines (or even components of machines) smaller than 1 mm. Mass production of small components ends with wristwatch parts with dimensions of a few millimeters and an accuracy of 10 m (0.0005 inch). In contrast, it is possible, using present integrated circuit fabrication technology, to fabricate accelerometers with on-board logic circuitry where the entire device is a few millimeters square. A recent innovation is the manufacturing of integrated circuits that contain thousands of sub-millimeter tilting mirrors on a single silicon circuit. Each mirror can direct a beam of laser light to create a large projection screen television measuring 3-10 meters (10-30 feet) in size. In a similar fashion, vidicon-tube-based TV cameras have all but been displaced by solid-state charge coupled devices (CCDs) that are much smaller and less expensive to construct and that, because of the lower cost, are finding significantly broader markets. The innovative development of the CCD camera has not only displaced its competition but has created an entirely new industry in video cameras and, in conjunction with the Internet, is making video-conferencing a practical reality. The micro-scale world is only a stopping-off point to the nanotechnology world of the 21st Century. Current micro-electro-mechanical systems (MEMS) are limited in size by the wavelength of light (0.7 m or 0.000028 in.) used in the lithography processes that create the patterns necessary to the chemical processing that produces these devices. Dr. Eric Drexler at Foresight Technology12 and Dr. Ralph Merkle at Xerox Corp. envision a world in the not-to-distant future where significantly smaller molecular-scale manufacturing will become commonplace. In the nano-scale world (a nanometer is 10-9 m) virtually any conceivable electrical, mechanical, chemical, or even biological device can be synthesized rapidly from raw materials using assemblers that can make copies of themselves (reproduce) and that can be instructed to make (or assemble) a few other useful molecules. Drexler and Merkle envision a nano-scale manufacturing factory that might resemble a present-day oil refinery rather than a conventional machine shop. In this factory, appropriate as12
K. Eric Drexler, Engines of Creation, New York: Anchor Books - Doubleday, 1986.
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semblers would be directed by computers to create extremely large molecules that might in fact be microprocessors, optical communication devices, information-storage devices, or smart materials. These smart materials could be fashioned into, for example, eye glasses that are sensitive to the intensity of light so as to change their opacity (tinting sun glasses), capable of changing their curvature to allow for the changing eyesight of the user (reprogrammable prescription glasses), or capable of determining the distance to the object that the wearer is looking at and then adjusting the curvature to bring that object into focus. Future Stretch Goals The future manufacturing capabilities available with MEMS and molecular manufacturing processes are of such revolutionary magnitude that their potential should not be overlooked by any significantly sized NGM Company. The first companies to transition successfully to a profitable MEMS or molecular manufactured product clearly will have established a marketing position difficult for its competition to catch. NGM companies interested in participating in the transition to molecular manufacturing in the next decade should form consortia with research universities and basic research organizations. It is clear that a highly interdisciplinary team (applied physics; optics; materials science; chemistry; and chemical, mechanical, and electrical engineering) will be needed to carry out this revolutionary research task. 4.3.4 Rapid Prototyping Over the past decade, enormous progress has been made in the development and application of a new manufacturing process commonly referred to as rapid prototyping13,14 (RP). This is an accreting process in which material is incrementally or continuously and selectively added, one layer at a time, to a preliminary foundation. Parts are generated directly from software that reads and interprets solids-modeling CAD files to form three-dimensional solids of simple or complex shape requiring minimal clean-up and generally no secondary fabrication processes. State of the Art/Best Practice/Pilots Currently, there are approximately 30 RP processes under development, including stereolithography (which grows parts from a pool of photo-sensitive polymer liquid), selective laser sintering (in which a laser melts and fuses particles of plastic or wax), and three-dimensional printing (which sprays a binder directly onto ceramic powder). Applications for parts produced by RP processes are generally non-structural because they are made from materials that have very limited load-carrying capability. As the Rapid Prototyping name implies, however, these parts are very useful for the early stages of product development that include product conceptualization and visualization, manufacturability assessment, and part assembly fit check. They are also useful for functional models, displays, scale-model testing, mold or casting patterns, and non-structural functional parts. The NGM Company should assess continuously the value of implementing and integrating RP processes into their product realization cycle, particularly when there is a need for physical prototypes and customer interaction. Prototypes generated from modern RP processes significantly shorten the early stages of product development and greatly enhance product visualization for effective customer interaction, thereby reducing costs and strengthening customer relations. Commercial RP equipment is now available from service bureaus, and remote access can be handled similar to the way desktop-publishing files can be submitted to an electronic printing service bureau. Additional challenges for continuous improvement of these processes include increasing production speed while maintaining or further improving part quality, increasing part size, integrating new materials, and automating or minimizing post-fabrication clean-up. Future Stretch Goals The RP process is currently being extended, by a process called direct fabrication (DF), to the construction of metallic, structural hardware. These direct-to-functional-part manufacturing processes are being developed at
13 Paul F. Jacobs, Rapid Prototyping & Manufacturing - Fundamental of Stereolithography, Society of Manufacturing Engineers, Dearborn, MI 1992. 14 Paul F. Jacobs, Stereolithography and Other RP&M Technologies, Dearborn, MI: SME Press, 1996.
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several private-sector companies and at two DOE national laboratories. They involve the use of metal powders that are fused through laser sintering, thermal spray processes, or thermal metal jetting. These processes can produce full-density parts ranging in size from tenths of millimeters to meters. Metals ranging from solder alloys to aerospace superalloys have been used successfully to fabricate both perimeter and solid objects. Future applications of these technologies suggest the possibility of remote fabrication of military and space hardware. The CAD files could be sent electronically to a remote direct fabrication facility such as a ship or space platform, thereby eliminating the need for expensive, heavy, and space-consuming onboard spare parts. For the NGM Company, the agility and cost savings implied by using a fabrication process that requires only different CAD files to manufacture small production lots of variable parts could be very significant.
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5.0 ACTION PLANS This paper focuses on technologies that support rapid, economical, and continuous process improvements in an information-driven, extended manufacturing enterprise. This type of manufacturing environment is built around the following elements: Collection, storage, and continuous refinement of manufacturing process and equipment knowledge and knowledge of how these interact with products Techniques and equipment that use process and equipment knowledge to develop process plans that are optimized before being committed to the shop floor Rapid and economical means of implementing optimized process plans using commercially available modular equipment and software Commercial equipment and standardized methods for communicating, storing, organizing, retrieving, and processing manufacturing information within an integrated manufacturing enterprise. The first two activities are carried out above-the-shop-floor, while the last two are on-the-shop-floor. The following three action plans are recommended development activities for industry, government, and/or academia to undertake: Process Design Environment (PDE): Development of an environment to be used by the process engineering team to gather knowledge about manufacturing processes and create optimized process plans. Intelligent Processes and Equipment (IP&E): Development of hardware and software to implement optimized process configurations on the shop floor using modular machine tools and modern computer control equipment. Manufacturing Collaborative Environment (MCE): Development of information services needed to operate in a collaborative extended enterprise. Table 5.0-1 on the following page cross-references the 12 enablers and the three proposed action plans. The term primary in the table indicates that the goals of the actions plans directly support the needs expressed by the enablers. Not every enabler is represented by an action plan, and the Enabling Technologies are currently being implemented through industry consortia and therefore do not need an NGM action plan. Table 5.0-1. Interrelationship of MP&E Enablers and Action Plans
Enablers Process Design Environment Primary Secondary Primary Secondary Primary Secondary Action Plans Intelligent Processes Manufacturing & Equipment Collaborative Environment Secondary Primary Primary Primary Secondary Primary Secondary
Process & Equipment Understanding Development of Methods for Understanding Mfg Processes Benchmarking of Manufacturing Processes on Global Scale Fundamental Research & Its Transfer Modeling & Simulation of Processes & Equipment Process & Equipment Acquisition & Implementation Development of Equipment Standards Development of Intelligent Closed-Loop Processes Information Sharing of Processes & Equipment Throughout the Enterprise/Supply Chain Predictive Maintenance Enabling Technologies Flexible, Modular & In-line Cellular Processes & Equipment High-Speed Machining Macro-, Micro-, Nano- Technologies Rapid Prototyping
Secondary Primary Primary Secondary
Secondary
Secondary
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5.1 Development of a Process Design Environment The process engineering team must design and optimize manufacturing processes across an extended enterprise rapidly, reliably, and economically. This activity requires an integrated set of productivity tools that include factory modeling, process modeling, process analysis, process simulation, process optimization, process validation, process planning, process configuration control, acquisition and storage of real-time process variables, and communications with shop-floor activities and personnel. Although a similar electronic environment exists for the product design team, its analog for the process design team does not exist currently. The product design team concept is the basis for this development activity. The Process Design Environment (PDE) is the conceptual collection of all of the software and hardware tools needed to accomplish the process design activity. Figure 5.1-1 shows the three major components of the PDE and some of the application programming interfaces (APIs) and communications links between the components. Figure 5.1-2 shows how the PDE can be implemented using an intranet (a local area network) as well as the Internet to allow the creation of a globally dispersed extended enterprise. Typical operation within the process design environment is envisioned as follows. Electronic libraries allow the sharing of information among the process design team members, who could be spread across a geographically extended enterprise. Most of the material properties and models in the library would be in the public domain, but some vendors may wish to supplement the libraries with proprietary data for which the end user would pay a fee. The process design team would import material properties, process models, and equipment models over the intranet or Internet to the process design workstation. This workstation is analogous to a product design workstation which executes CAD and product-performance simulation software (e.g., stress analysis, dynamic modeling, heat transfer modeling). Through the Process Design Workstation (PDW), the team directs the open-architecture controller (OAC) either to collect information about the manufacturing cell or to execute the manufacturing process plan. Using the workstation, the process design team assembles library models and parameters into an overall process model. The team then develops a process plan and simulates its performance using commercial software.
Product Info
Shop Floor
Electronic Libraries Material Properties Standardized APIs
Process Design Workstation
Open Architecture
Process Models
Equipment Models
Modeling, Analysis, Simulation, Design, Optimization, Process Validation & Config. Control
Standardized APIs
Process Models & Parameters
Process Characterization Modules
Controls Modules
Figure 5.1-1. Process Design Workstation and Supporting Hardware and Software
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Electronic Libraries Intranet Open Architecture Controller(s)
Materials
Process Mode
Product Description
Process Design Workstation Sensors Machine Description Machine Configuration
Manufacturing Cell(s)
Process Design Environment
Figure 5.1-2. Process Design Environment Because the cost and time to try new process plans is low, the engineer could try many product, process, and resource designs before selecting the optimal design. Once the process team has an optimized process plan, the plan can be validated by a simulation. Having built confidence in the new manufacturing process plan, the process team then downloads the validated control parameters to an OAC, and the process plan is ready for production. The three major components of the process design environment are: Electronic Libraries: The electronic libraries contain material properties, process models, and equipment models in both human- and machine-readable format. For a given process, the materials and process must be selected and process-specific parameters supplied to the models. As in any library, information varies from simple to complex; the process design team will use engineering judgment and prior analysis to select the appropriate materials and models. Process Design Workstation: The PDW communicates with the electronic libraries and the OAC to move data and models. The workstation uses commercial analysis software packages and extends their capabilities to allow the process design team to assemble a composite model for the process, design controls, simulate and optimize the process, and validate its performance. The PDW accepts process characterization data from the OAC that will provide process-specific parameters for the models. Once the design is complete, the PDW downloads the controls parameters to the OAC. Many software packages that can do portions of the process design tasks are now commercially available. 15 Open-Architecture Controller: The OAC performs two major functions. First, its controls modules accept parameters from the PDW and it carries out the previously validated controls scheme. Second, it incorporates special modules that allow it to acquire real-time process data. Therefore it can excite the process and acquire data for various tasks, such as transfer function generation, process tuning, and predictive maintenance.
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Matlab/Simulink/toolboxes (The Math Worksanalysis, simulation, design), MATRIXx (Integrated Systemsanalysis, simulation, design), Extend (Imagine Thatdiscrete event modeler), Virtual NC (Denebmachine simulation), and Cimstation (Silmamachine simulation).
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Internet Connection
Additional Research Needed Much, but not all, of the information needed for material properties, process models, and equipment models exists in some form. Some fundamental research in material properties and process modeling is needed nevertheless. To protect the investment in modeling software against commercial product and language obsolescence, research is needed on a neutral model representation that allows generation of new model formats as needed. As new commercial products and/or languages appear, only a module converting from the neutral model representation to the specific model representation need be written; all previously written neutral model software remains valid and operational. 5.2 Development of Intelligent Processes and Equipment A significant barrier to continuous and rapid process improvement has been the inability to implement, in a timely and economical manner, changes to process design and process equipment. This section describes two approaches to rapid and economical process changes: modular manufacturing processes and advanced control extensions. Modular Manufacturing Processes For many manufacturing jobs, manufacturing capability is needed for a period of time that is short in comparison to the life of the process equipment. In addition, the equipment is often sized and purchased, not for the current part being manufactured, but for the worst-case part that one can envision in the life of the process. Both of these practices tie up valuable capital in equipment that is not fully used. Modular Manufacturing Processes (MMP) addresses the problem of better utilization of equipment, rapid and economical attainment of process capability that is sized to current needs, and the ability to change the process as requirements change. The success of MMP is constructed around two key concepts: standardized, characterized building elements (SCBEs) and automated software tools that quickly design, evaluate, implement, and document manufacturing processes built with SCBEs. In the MMP concept, manufacturing capability is assembled from SCBEs as needed, disassembled when not needed, and SCBEs reused in other processes. To rapidly and economically bring manufacturing capacity on-line, MMP depends on SCBE-based software tools to automate design and analysis tasks that previously took much longer times. The SCBEs form the basic elements of the manufacturing process. Some typical SCBEs would include: mechanical structural components (base plates, brackets, columns, etc.), metrology reference structural components, hydraulic rams with standardized plumbing connections, linear and rotational axes with standardized interconnects, axis drives, and servo components (open-architecture controller, sensors, and actuators with standard connectors), and process monitoring and logging hardware. Because the SCBEs are standardized, they can be manufactured in larger volumes with resultant lower cost. In addition, SCBEs will be more fully used over their lifetime than devoted process equipment. Large companies can own a variety of SCBEs relevant to their activities (i.e., tool crib concept), small companies can rent SCBEs as needed to create rapid and economical manufacturing capacity for a particular contract, and government agencies can supply SCBEs for the life of a contract. In all cases, when the process is no longer needed, the SCBEs go back into service in another process. To make the implementation of new processes rapid and economical, software tools that are SCBE-savvy are used to aid the process engineer to design, evaluate, optimize, implement, and document the new process. Because MMP uses standardized and characterized elements, many critical features about the SCBE are known and others can be pre-calculated. As elements are joined to form a process, the SCBE-savvy software automatically defines the boundary conditions that link the SCBE components together. The SCBE support software is specifically designed so that the process engineer does not have to be a computer guru to get his job done. Using his experience and support software, the process engineer will graphically join SCBE components together at a very high level to form the desired process while the SCBE-savvy software builds detailed process models automatically. The detailed model is then used to evaluate process performance in a SCBE-friendly computational environment. In addition to optimizing the process design, this same automation technique is used to generate other items needed to implement the process, such as: assembly drawings
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and documentation for SCBE components, automated generation of special post-processing modules needed to generate the part program, automated generation of modules for the open-architecture controller, of the process-specific electrical and electronic drawings and documentation, and of inspection programs. Figure 5.2-1 illustrates how a typical process design would proceed.
Establish Critical Requirements
Process Concept Optimization Expand requirements to process options and then optimize at a high level.
Automated Detailed Process Design Fill out optimal concept into detailed design using SCBE. Analyze and evaluate design.
Build?
No - Problems
Yes
Expand Out Process Support Software Automatically generate software needed for SCBE-based process design.
Build & Characterize Process Assemble SCBE-based process & get on-line.
Process is Operational
Figure 5.2-1. Overall Flow for Modular Manufacturing Processes Advanced Control Extensions Historically, controls vendors have supplied proprietary hardware and software solutions that were inflexible and expensive. The high cost and long time delays associated with the development of advanced process controls prohibited their large-scale use on the shop floor. Commercial OACs are currently on the horizon and will allow end users the functionality and flexibility to implement advanced process controls. A critical concept of OACs is the use of open standards that are accepted by the manufacturing community and supported by equipment suppliers. Examples of these standards include APIs for the OAC that allow third-party vendors and end users to write modules for the OAC and I/O interfaces. Because of its versatility and capabilities, the OAC plays a central role in the Intelligent Processes and Equipment action plan. Figure 5.2-2 illustrates the major components of a generalized OAC and its interface to a manufacturing cell. The manufacturing process is being both characterized and controlled in an information-driven manufacturing enterprise. The open-loop mechanical hardware (the manufacturing cell) is shown in the oval. This mechanical hardware could be a milling machine, lathe, or hydraulic punch press that needs closed-loop motion and miscellaneous open-loop control.
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Materials Sensors
Manufacturing Process Under Control

Actuators
Product
I/O Module Control Module Process Model Process Design Environment Control Parameters Control Strategies Operator Control Panel
Man/Machine I/F Module
Process Characterization Module
Open Architecture Controller
Figure 5.2-2. Intelligent Process and Equipment Concept The manufacturing process interacts with the OAC through sensors (temperature, position) and actuators (valves, motors) located on the mechanical hardware. The OAC sits at the center of the activities, where its functions include: Coordinating process activities Collecting real-time process data used by the PDW Reading sensor variables Issuing actuator signals Calculating control actions Interfacing with both the human operator and the local network.
Using an OAC, the major development activities could include: Developing a communications interface in the OAC for exchanging modeling data and controls parameters between a PDE and an OAC. Developing a process characterization module in the OAC. The function of these modules could include process transfer-function generation, process-tuning, and predictive maintenance. Developing an OAC controls module to allow control parameters for various classes of control algorithms and strategies to be downloaded from a PDW to the OAC.
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Additional Research Needed Additional work using SCBE models and automated generation of key components is needed. In an information-driven manufacturing enterprise, additional communication within the enterprise may be needed for activities involving operator and maintenance notification, status reporting, and statistical model development. 5.3 Development of a Manufacturing Collaborative Environment Effective and open communication among partners in an extended enterprise (customers, vendors, suppliers, R&D partners, and government agencies) will be essential to the survival of the NGM enterprise. The staff of an extended manufacturing enterprise must continuously update and share their knowledge of manufacturing processes and equipment with partners. Information sharing can occur at a number of levels: Within a working group or team Between teams or other organizational elements in a company (e.g., an Integrated Product Design team) Between partnering companies or potential partners (extended enterprise) Within standards committees In technical publications and at conferences.
In many instances, the need is not necessarily for new technology but simply for a means to locate and implement current technology. In the past few years, the Internet has assumed a leading role in electronic communications, allowing the platform-independent transfer of files between heterogeneous computers. This apparently trivial concept is the key to the sharing of knowledge the information must be stored in a format that allows it to be interpreted by humans as well as by the software that is to use the information. Herein lies the major challenge for the future the ability to standardize file format so that its content can be transparently read and used by disparate computers and software. Turning the potential of the Internet into a collaborative environment for manufacturing is the goal of this project. The types of information that could be made readily available include but are not limited to: Standards: A forum (electronic bulletin board) for the development of new equipment or equipment standards. Standards-setting organizations could make interim standards available electronically to allow a wider audience to comment on them and to evaluate their implications. Research: Information on academic, basic, and applied research being conducted and a method of pairing research organizations with manufacturing organizations. Research list servers would disseminate ongoing research quickly to exactly those individuals wanting to know them. Libraries: Both free and for-fee libraries containing process models, equipment standards (size capacity, axes of motion, accuracy, repeatability, power and service requirements, etc.), and records of industrial Best Practices including detailed process plans that could become templates for future process plans. Vendor Information: Description and availability (scheduling) of vendor equipment. This information could allow the semi-automatic development of process plans that include sub-tier suppliers. The intent of this activity is to develop the infrastructure to put all manufacturing process and equipment knowledge into machine and human-readable format and to allow it to be easily updated and disseminated. This knowledge now resides with skilled craftsmen, process operators, supervisory personnel, process planners, process machine programmers, and manufacturing engineers, as well as in books and conventional libraries. The intent is to create an environment in which this information can be shared more readily among the knowledge workers to allow more informed decisions to be made. Additional Research Needed Much, but not all, of the knowledge needed exists in some form but not necessarily in an electronic form and almost certainly not in a standardized file format (e.g., tagged field database). Needed research includes the creation of standardized databases to contain the manufacturing information, and user-friendly front-end interfaces to allow humans to peruse, augment, and update the information and to augment or update the information. Software tools are needed to create user-friendly and machine-readable files that can be shared
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over a heterogeneous network of computers. This will be followed by development of software tools to do factory-floor planning, process selection, and manufacturing process optimization. 5.4 Summary of Action Plans Many industrial, governmental, and academic organizations are participating in the NGM project.. Each of these three sectors has distinct talents, needs, and reasons for their participation in NGM and in the activities that will make NGM a reality. Industry is both the customer and supplier of its own goods; it has a shortterm investment horizon and generally finds it difficult to sponsor long-term high-risk R&D activities. Governmental organizations generally are willing to participate in activities that will help all taxpayers and help to build or maintain a strong industrial base. Academia, although generally interested in a search for knowledge, has the technical credentials to develop new and innovative devices if incentivized by well-defined industrial needs and if assured that federal funding will assist in the support of such activities. Table 5.4-1 lists the three sectors and the roles each might play in implementation of the three actions plans outlined above. Near term refers to activities that can be started and finished in 1 to 3 years and medium term refers to 3- to 6-year activities. Table 5.4-1. Involvement of Stakeholder in the Development of Action Plans
Sector Industry Near Term PDE: Industry & government should jointly perform initial PDE system design & participate in proof-ofcommunications demonstrations IP&E: Industry & government should jointly perform initial system designs, including OAC modules, & participate in proof of communications concept demonstrations IP&E: Universities, in collaboration with controller equipment suppliers, should develop advanced control algorithms & strategies PDE: Industry & government should jointly perform initial PDE system design & jointly participate in proof of communications demonstrations IP&E: Industry & government should jointly perform initial system designs, including OAC modules, & participate in proof of communications concept demonstrations MCE: Demonstrate a collaborative environment including initial population with all publicly available information PDE: Collaborate with government-industry teams developing PDE & OAC hardware/ software IP&E: Universities, in collaboration with controller equipment suppliers, should develop advanced control algorithms & strategies MCE: Begin to develop capability to add new information while still retaining control Mid-Term PDE: Industry should begin commercial sales of OAC modules & PDE workstation software. IP&E: Controller equipment suppliers will develop OAC modules. Controls equipment suppliers will develop specialized sensors & actuators for new & existing equipment MCE: Develop a commercial data input system & demonstrate an environment for research & vendor collaborations PDE: Procure & install prototype PDE & OAC hardware & participate in government-industry demonstrations
Government
Academia
PDE: Develop PDE & OAC environments using parallel computer configurations to demonstrate faster processing & inter-processor work sharing IP&E: MCE: Translate previously developed & published process models into OAC modules
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January 1997
Prepared By: The NGM Engineering Tools Thrust Team
CONTRIBUTORS Steve Holland, General Motors, Team Leader Paul A. Erickson, Sandia National Laboratories, Lead Author Doug Braithwaite, Massachusetts Institute of Technology Mitch Heller, Raytheon Company John J. Mills, Agile Aerospace Manufacturing Research Center, University of Texas at Arlington John Richardson, Texas Instruments Cecil Schneider, Lockheed Martin Aeronautical Systems
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The NGM Framework

Global Drivers
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People
The NGM Company

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H L M H H H H M L M
H H H H H M L M M H
H L H H H M H H H H
H H H H H M M M H H

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M M * H H
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M M H H H
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H H
H H H
H H H
M - Medium Impact
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H H H M
Impact On
Change Management

H M M H H M L M H H
Global Drivers
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Investment/Finance
Technology
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Knowledge Supply
Product Life Cycle
Human Resources
Sourcing/Teaming
Environmental
Innovation
CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 Imperative Definition ............................................................................................................................. 3 2.0 Benefits................................................................................................................................................... 5 3.0 Barriers to Implementation .................................................................................................................... 7 3.1 Limited Access to Models ................................................................................................................. 7 3.2 Technology Cost Barriers.................................................................................................................. 7 3.3 Integration Barriers........................................................................................................................... 8 3.4 Complexity Barriers .......................................................................................................................... 8 3.5 Verification, Validation, and Accreditation Barriers.......................................................................... 9 4.0 Enablers to Overcome Barriers ............................................................................................................. 10 4.1 Usable Models ................................................................................................................................ 10 4.2 Improved M&S Tools .................................................................................................................... 11 4.3 Integration Technologies ................................................................................................................ 12 4.4 Hybrid Prototyping ........................................................................................................................ 13 4.5 Innovative Design Concepts ........................................................................................................... 14 5.0 Action Plan Recommendations ............................................................................................................ 16 5.1 Useable Models .............................................................................................................................. 16 5.2 Develop Improved M&S Tools ...................................................................................................... 17 5.3 Develop Integration Technology Frameworks ................................................................................ 18 5.4 Hybrid Prototyping Techniques ..................................................................................................... 19 5.5 Develop Innovative Design Concepts ............................................................................................. 19 6.0 Metrics ................................................................................................................................................. 21 7.0 Sources ................................................................................................................................................. 22
ACRONYMS & ABBREVIATIONS CAD CPU DoD IPPD M&S NAMT NGM NIST PC PDM RPPR VV&A WWW computer-aided design central processing unit U.S. Department of Defense integrated product/process development modeling and simulation National Advanced Manufacturing Testbed Next-Generation Manufacturing National Institute of Standards and Technology personal computer Product Data Manager rapid product/process realization verification, validation, and accreditation World Wide Web
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EXECUTIVE SUMMARY In the NGM Enterprise, modeling and simulation (M&S) will reflect a new way of doing business rather than a supporting technology. It will make virtual production a reality. All production decisions will be made on the basis of modeling and simulation methods, rather than on build-and-test methods. M&S tools will move from being the domain of the technologist, to being a tool for all involved in the product realization, production and business processes. Why is it Important? M&S will eliminate the need for developing hardware prototypes and allow for lot sizes of one. This will dramatically decrease time-to-market for new products and services. It will provide products and services optimized for the customer and other stakeholders. It will require significantly fewer resources in the development process than build-and-test methods. Key Concepts The entire enterprise, spanning multiple organizations, will be modeled and simulated prior to production. Tradeoffs will be made at all levels to optimize the design, the plant, the equipment, and production processes. Individuals using M&S tools will gain specific knowledge and expertise in product and production processes. Alternatives can be tried and evaluated. Manufacturing knowledge will be generated in a similar manner to current production, but in much less time. The tools will allow the individual to enhance his/her skills, rather than dictating an action. M&S will be a key to marketing and sales as well as product realization. It will allow the customer to interact with the development team in specifying requirements and the resulting product definition. The customer can use M&S to test the product before the final design is set. M&S will become a broad-based industry with a range of products and services. In addition to application software, geometric models, behavior models, and simulators for processes and equipment will be available in libraries and in the marketplace. These software components will be assembled, required simulations executed, and results will be presented using specialized computer graphics hardware and software. Whats New? All aspects of the enterprise will be modeled and simulated; and all business and technical decisions will be made based on the results of the models and simulations. Modeling and simulation will be the source of new manufacturing knowledge and expertise. M&S information brokers will assist in identifying, locating, and accrediting models and tools. Modeling and simulation will be a broad-based industry with a range of products and services to support NGM Enterprises. Action Recommendations 1. Increase the number of accessible models for simulation, by encouraging vendors to provide geometric and behavioral models with products and establishing national libraries of validated models of equipment and products. 2. Extend the coverage of commercial software tools to address current weaknesses in the product/process life cycle including tools for embedding customer requirements and market analysis, planning and execution aids, and process optimization into the development process.
3. Support the development of an integrating framework for modeling and simulation that is necessary to both develop and apply improved modeling and simulation tools. Develop standards for this framework, using existing standards where possible. 4. Encourage the establishment of modeling and simulation information services/brokers. 5. Support fundamental advances in representation and modeling are needed to integrate multiple levels of simulation (discrete, geometric, physical) to enable virtual product/process/equipment validation. For M&S to assume this significant and pervasive role in the enterprise, a number of barriers must be overcome. The limited availability of usable geometric and behavioral models prohibits exploiting existing simulation tools. In addition, the models require extensive and costly validation to assure a match to physical reality. Presently, engineering analysis tools are expensive to acquire, time-consuming to operate, and require specialized training to use. Data, models, and applications are not integrated or standardized. The complexity of models, numerical simulation and software development are significant barriers to using M&S in development processes. Even with huge advances in computing power, interoperability architecture, and computer sensible models, there are limits to our ability to understanding physical reality in sufficient detail to replicate reality in a simulation environment. The enablers to overcome these barriers include: development and promulgation of usable models; de facto industry standards for models (including verification, validation, and accreditation methods); improved M&S tools to enable more accurate and sophisticated analysis; hybrid prototyping to couple digital simulations with physical devices to simulate the behavior of the system; technologies to integrate data, models, and applications; and innovative concepts in representation and modeling to integrate multiple levels of simulation. Development and deployment of these enablers will result in dramatic changes in the way companies operate. The change can be summarized as follows:
Today Point Solutions Customer Order (Off the Shelf) Successive Hardware Prototypes Stand-Alone M&S M&S Augments Design Process Models Costly & Time-Consuming to Create, Difficult to Share Models Not Available or Affordable M&S Tools Proprietary or Closed Discrete Event-Based Simulation of Manufacturing Processes Hard Tooling Fixed Capacity Difficult to Adapt On-the-Job Training Controlled Intellectual Property
Tomorrow Totally Integrated Package Solutions Customer Specifies Product Requirements Iterative Software Prototypes Yield First Production Unit Integrated M&S on Design Critical Path to Support All Business Decisions M&S is Primary Mechanism to Refine Product/Process Design Libraries of Usable Models Easily Accessible Availability of Models Driven by New Business Model Interoperable, Networked M&S Tools 3-D M&S Incorporating Time, Dimensional Variation, & Physical Properties Hard & Soft Tooling M&S Tools Enable Management of Variable Capacity Hybrid & Virtual Prototyping Simulators Provide Embedded Manufacturing Education & Training M&S Libraries & Tools Enable Collaboration & Sharing of Intellectual Property
1.0 IMPERATIVE DEFINITION Modeling and simulation (M&S) encompasses a variety of computer tools for design, analysis and implementation of processes and products. These tools are most often used (in a stand-alone manner) to evaluate various aspects of a process or a product. In general they are used by specialists to support specific decisions concerning product and process development, and comprise an incompatible group of vendor-provided and home-grown applications. Their use is currently severely limited by the burden of data (model) creation and re-creation, and by the lack of interconnectivity between different methods and simulation tools. In the Next-Generation Manufacturing (NGM) Enterprise, M&S will support all business decisions. It will reflect a new way of doing business, as opposed to a supporting technology. This new way will be referred to as Virtual Production, which can be defined as the state in which all production decisions (including product/process/material/equipment/plant/operations) are made based on modeling and simulation. M&S will provide the models and the computational framework so that the simulations will behave as much like the physical world as possible. The information infrastructure to support virtual production will be similar to (or possibly identical to) the infrastructure that supports actual production. Models will be flexibly combined and readily changed as basic technology and business processes change. Trade-offs will be made in near-real time to optimize the design and production process for products and the systems that produce them. M&S will eliminate the need for developing hardware prototypes, and allow production of lot sizes of one at an affordable cost. M&S will be the key to marketing and sales as well as product requirements definition and product realization. It will allow the customer to interact with the integrated product/process development (IPPD) team in specifying requirements and the resulting product definition. It will also help optimize process flow and reduce time between customer specification of requirements and delivery of product. For M&S to assume this central role will require dramatically increased availability of models, fully integrated support for virtual prototyping, and fundamental advances in representation and modeling. Verified models must be accessible through national libraries, vendors must supply models of geometry and behavior with the equipment (hardware), and the World Wide Web should be used as a distribution mechanism for existing models. New business models are needed to drive the availability of the models. The capabilities of commercial software tools must be extended to address current weaknesses in the product/process life cycle. Such extensions include tools for embedding customer requirements and market analysis, planning and execution aids, and process optimization into the development process. Integration frameworks are needed to fluidly couple discrete software packages and data for the construction of models, the simulation of systems and the visualization (presentation) of results. Integration Technologies are needed to provide input to various M&S applications and to provide the ability to perform cross-functional tradeoffs. Information systems must be developed which will integrate across disciplines, vendors, customers, etc., and be accessible through the National Information Infrastructure. An integrating framework or infrastructure is required to support integration, allowing different classes of users to integrate functions, applications, and data in a dynamic, heterogeneous environment. The largest potential for productivity growth is in the area of representation, where new algorithms can provide order-of-magnitude improvements. Fundamental advances in representation and modeling are needed to integrate multiple levels of to enable virtual product/process/equipment validation. Improved M&S tools are required to enable more accurate and sophisticated analysis of enterprises, business practices, plants, equipment, operations, products, and processes. These tools will contain more accurate mathematical representations of physical reality; better cost analysis methods that span the product life-cycle; more robust manufacturing process models; high-level product models; and advanced, interactive, userfriendly interfaces. Software engineering methodologies for developing complex simulation environments to support the rapid development of new simulations are also needed. These tools must be available and affordable for small as well as large manufacturers. The ultimate goal of virtual prototyping is to eliminate the need for hardware prototypes in the development process. It requires that all aspects of the behavior of the components and the system are well understood and
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can be modeled. This goal will not be achieved in the near term in most industries. Hybrid prototyping provides a means to approach this goal while enhancing product and process development. Hybrid prototyping involves coupling digital representations (models) with physical devices to simulate the complete behavior of a system. Integration of data, models and applications must be accomplished for M&S to impact Integrated Product/Process Development (IPPD)* and enable virtual prototyping. The infrastructure required to support virtual production is similar (if not identical) to the infrastructure that supports actual production. Integration technologies are needed to provide seamless input to M&S applications, to visualize the output of these analyses, and to enable cross-functional tradeoffs. Information systems must be developed to integrate across disciplines, vendors, customers, etc., and be accessible through the National Information Infrastructure. An integrating framework or infrastructure is necessary to support this, allowing different classes of users to integrate functions, applications, and data in a dynamic heterogeneous environment. Integration frameworks are also needed to fluidly couple discrete software packages and data for construction of models, simulation of systems and visualization (presentation) of results. Fundamental advances in representation and modeling are needed to integrate multiple levels of simulation (discrete, geometric, physical) to enable virtual product/process/equipment validation. Model representation refers to the manner in which the real-world problem is encoded within a computer's memory. The important point is that model representation is not just a matter of efficiency it determines to a great degree if a given simulation is practical to perform. Carefully matching computer representation to the problem being solved can impact execution time by 3, 4, or more orders of magnitude which can translate to a 1000 fold, 10,000 fold, or greater decrease in computer time. This kind of gain can quickly dwarf the factor of 2 improvements being given to us by chip makers current focus on faster CPUs.
* This document works from the existing baseline of the accepted definition of IPPD. However, the emerging concepts of Rapid Product /Process Realization Development (RPPR), which integrates design and manufacturing, is strongly supported. RPPR is addressed in a separate NGM Imperative paper.
2.0 BENEFITS Pervasive, next-generation modeling and simulation capability is a key enabler of the attributes required of an NGM company. Table 2.0-1 describes the relationship of the M&S enablers and the attributes of the NGM enterprise. Key benefits for each NGM Attribute include: Customer Responsiveness Pervasive M&S will facilitate the ability of the customer to interact with design, engineering and other enterprise teams in the product definition task, including negotiation of cost and quantity. The customer will be able to trade-off performance and cost, to obtain the desired product characteristics, and will be able to evaluate the quality of the final product. This is especially valuable if the product is an input to the customers products or processes. Physical Plant & Equipment Responsiveness Pervasive M&S will greatly enhance the responsiveness of plant and equipment. It will provide a virtual testbed to determine the quantity, mix, organization, and operational characteristics of manufacturing and plant equipment required to optimize the production process/flow of specific products. It will allow optimization of enterprise resources (globally if required) to produce a given product. It will permit feedback of machine/process characteristics (e.g., wear) into the design process. Teaming as a Core Competency Pervasive M&S will foster and improve teaming by providing a common testbed and framework for various disciplines and distributed partners to interact. By allowing all team members easy access to integrated data, applications and communications, teaming will be easier, more responsive, and cost less. Human Resource Responsiveness Pervasive M&S will free the user from model creation and data entry tasks, as well as results presentation and interpretation tasks. This will speed up the process and provide the user with more time for analysis and design tradeoffs. Table 2.0-1. Relationships Between M&S Enablers and NGM Attributes
NGM Attribute Customer Responsiveness Usable Models Customer uses product models in evaluation & selection Models speed manufacturing engineering processes Improved M&S Tools Customer collaborates in the design process M&S Enabler Integration Technologies Customers, partners & suppliers integrated into common environment Hybrid Prototyping Techniques Innovative Design Concepts
M&S tools enable variable capacity Feedback of process characteristics to design process M&S libraries & tools Standardized design promote & enable data & tools collaboration & sharing User interfaces provide increased productivity Models provide enhanced communication & reduce development time New business models drive M&S Common development environment & communications extend world-wide
Existing hardware & software can be integrated w/ product hardware & software Manufacturing reTools to evaluate sources can be processing alternabrought on-line & tives improved by evolutionary process Collaborative engineering tools & design methodologies enhance teaming Hybrid prototyping simulators enable online manufacturing education & training
Responsive Practices & Cultures
Global Market Responsiveness NGM M&S will provide a significant reduction in time-to-market for a new product. Modeling and simulation not only affects time-to-market, but also manufacturing quality, particularly in small lot sizes or custom products where corrections over time are not possible. Responsive Practices and Culture NGM M&S will stimulate new ways of doing business. Virtual production will enable all product, operational and business decisions to be made on the basis of computer models and simulations, and production started without building physical prototypes. This will dramatically decrease time-to-market for new products and services.
3.0 BARRIERS TO IMPLEMENTATION A number of barriers must be overcome for M&S to assume a significant role in IPPD. Limited access to usable geometric and behavioral models prohibits widespread use of existing simulation tools. Presently, engineering analysis tools are expensive to develop or acquire, time-consuming to operate, and require specialized training to use. The complexity of models, numerical simulation, and software development are significant barriers to development of robust modeling and simulation capabilities. Data, models, and applications are not integrated or standardized. These barriers must be overcome to enable real-time tradeoffs in the development process. There are cultural barriers to the development, implementation, and acceptance of M&S as a core enterprise management tool. These are not covered in detail in this paper. General enablers to overcome cultural barriers are identified in other NGM Imperative papers, indluding workforce flexibility. 3.1 Limited Access to Models Use of M&S is limited by the availability of usable models. When simulation tools are available, it is often not feasible to use these tools because it would be too costly and time-consuming to build the computer models for the simulation. In certain cases, it is faster to set up the automation line and use it as a testbed than to construct the models and run the simulation. Not only is it faster, but it provides high confidence in the result. Models and simulation tools just dont exist for many processes, and must be developed. The time required to develop these models is usually prohibitive. In addition, the models require extensive and costly validation to ensure a match to physical reality. In many cases, behavioral models for equipment are required as well as geometric models. These models most likely come from the equipment vendor if available at all. 3.2 Technology Cost Barriers Engineering analysis tools are expensive to develop or acquire, time-consuming to operate, and require specialized training to use. Collaborative engineering and electronic commerce services may smooth the transition into virtual corporations, but the cost of establishing and using these services frequently exceeds the benefits. The cost of information infrastructure and integrating frameworks remains high. Development Costs The cost to develop and support in-house engineering tools is usually higher than the cost to purchase the tools. In some cases the tools are simply not available and must be developed internally. Once tools are developed, they must still be validated, which adds to the expense. Acquisition Costs The cost to purchase M&S tools remains high. The initial purchase price of software is only the tip of the iceberg. There must be hardware and networking to support the tools, and these types of assets are expensive. There is a pressing need to reduce the costs of information systems technologies that support M&S operations. For small and medium-sized companies, these costs can be prohibitive. Operational Costs The operating costs to support M&S are the most difficult to measure. These costs include software maintenance, model construction, data preparation, and results presentation. A number of these functions are performed by the expert user of the tool, which further increases the costs. The cost of tailoring an application to a specific need must also be included. The costs to verify data models and physics models can be quite high. Setup of simulation parameters typically requires deep knowledge of the physical, chemical, and mathematical foundations of the problem domain. Many M&S tools are not user-friendly and require considerable training and experience to operate properly.
Training Costs Most M&S tools require specialized training to operate. In addition, a deep understanding of the subject matter is also necessary to appropriately use many of the tools. Many current tools provide window-based interfaces, but require more active help, such as intelligent agents. 3.3 Integration Barriers For M&S to assume a central role in product and process development will require an infrastructure similar to (or possibly identical to) the infrastructure required to support IPPD. This includes access to data in legacy systems, standards for data representations and exchange, modular M&S tools, and integrating frameworks. For a more detailed discussion of these kinds of integration issues, see the NGM Imperative papers on Adaptive, Responsive Information Systems and on Enterprise Integration. Legacy Systems/Cost to Transition A significant amount of the geometric information, models, and data that comprise the nations M&S resource base exist in legacy systems. The cost of using this data may be higher than creating new models. Effective means of translating this data into usable models must be developed. In certain cases, it may be desirable to mine this data to capture engineering relationships. No Accepted and Used Standards Another major barrier to next-generation pervasive M&S is the lack of specific standards of all kinds. The availability of certain standards will enable the move to information infrastructures, but there are many conflicting standards and many standards lacking. For example, there are diverse standards in high-level communications, particularly for passing of messages among distributed objects on heterogeneous systems, and for data exchange. There are also diverse standards for graphical user interfaces, for man-machine interface, and for documents, images, video, and sound, all of which will be increasingly important for next-generation manufacturers. Also, there is no accepted standard representation language for the models themselves. Concomitant to this barrier is vendors attitude to open architectures. They are typically unwilling to open up their applications so that users can access single functions, and unwilling to standardize the attributes of data inputs and outputs. While there are currently good business reasons for this attitude, we need to move to a different business paradigm: an environment in which modules provide business, engineering, and production transformation services that can be accessed as units. Standards for engineering data, models, applications and physical test are also needed. There are no standards for verification, validation, and accreditation (VV&A) of models as further discussed in Section 3.5 below. No Integrating Frameworks Software for manufacturing process simulations is typically expensive to develop, rarely results in reusable code, and is difficult to maintain. The creation of integrating frameworks would reduce the cost of software development and increase the use of M&S among large and small manufacturers. There is also a general focus on point solutions within the industry, with little attention given to the nature of the interfaces that are necessary for generic applications. A major reason why this is true is that neither the vendors nor the users understand the importance or the nature of the interface between modules. In any modular system, the interface definition is critical to assembly of those modules into larger functional units. These modules need to have clearly defined and standardized interface definitions that allow them to be rapidly integrated within a universal framework. 3.4 Complexity Barriers Complexity of data, physics models, numerical simulation, and software development are significant barriers to development of robust modeling and simulation capability. The computational requirements for complex models can be prohibitive, and the complexity of developing integrated M&S software environments is also a major barrier.
Data Models In certain cases, available model includes more data than the M&S requires. There are features in the data model that do not significantly affect the result of the analysis. However, these features can require significantly longer computational time, or obviate use of the M&S tool. In general, removal of these features requires an expert user and can be quite time-consuming; in many cases, it is easier to construct a new model. For example, a car designer may only require the envelope of a shape and the mounting features of a component, not an assembly computer model of the component. Physics Models Process simulation software is extremely difficult to develop for new applications because of the underlying physics and numerical simulation techniques. Manufacturing processes such as casting, forging, and powder metallurgy involve complex operations that transform raw materials into useful materials. These processes are difficult to model. Manufacturing operations may be unique to a particular company and require a unique model. Tools must be able to support these proprietary processes. Computational Complexity Certain models and simulations are so computationally complex that current state-of-the-art computers are not fast enough to perform the required computations. There is a need to make M&S tools more available and usable for all users, whether they use PCs or massively parallel computers. Software Development Antiquated data structures and poor software design make development and maintenance costly. Reuse of software is rare, which increases software development costs and time-to-market even though process simulation software typically share similar infrastructures. 3.5 Verification, Validation, and Accreditation Barriers Availability of models is not sufficient; the user must have confidence that the model is credible. For a user to make effective use of libraries, it is necessary that the models be correct and proper for their intended purpose. There are currently no formal, standardized mechanisms to provide that surety. There are numerous methods for software verification and validation, but this is only a part of the necessary verification and validation process. The response of behavioral models needs to be checked with the observed (measured) results. The accuracy of geometric models must be specified, and an accreditation agent must provide official certification that the model is acceptable for a specific application. Model Verification, Validation, and Accreditation (VV&A) is designed to enhance in the eyes of the user the credibility of the model, thereby fostering the user's willingness to believe in, and act upon, the model's output. VV&A provides the user with a history of model usage; it documents the models strengths, weaknesses, and limitations in various problem domains; and it allows the user to assess level of risk when using a model (and its output) for a particular purpose. VV&A consists of three parts. Verification is the process of determining what a model or simulation accurately represents the developer's conceptual description and specifications. Validation is the process of determining the degree to which a model accurately represents the real world from the perspective of the intended model use. Accreditation is the official determination by the accreditation authority that the model is acceptable for a specified purpose. Even when VV&A models are available, the user must calibrate these models to new situations.
4.0 ENABLERS TO OVERCOME BARRIERS The major enablers for the NGM M&S are: Usable Models, Improved M&S Tools, Integration Technologies, Hybrid Prototyping Techniques, Innovative Design Concepts. The relationship between the enablers is shown in Table 4.0-1. Within each major enabler, sub-enablers are identified in the sections following the table. Table 4.0-1. Relationships Between M&S Enablers and Barriers
Barrier Limited Access to Models Usable Models National libraries of usable models Product models provided w/hardware Affordable libraries of usable models Enhanced distribution of models Physical models for manufacturing processes Libraries of usable models with VV&A Standards for VV&A Improved M&S Tools Enabler Integration Technologies Standards & translators to enable access to existing models Enhanced user interfaces Integrating Frameworks Hybrid Prototyping Techniques Hybrid prototyping allows use of physical components Hybrid prototyping tool for education & training Hybrid prototyping techniques Hybrid prototyping Innovative Design Concepts M&S Information Brokers provide models
Technology Cost Integration Complexity
Fundamental advances in model representation
Verification, Validation, & Accreditation
4.1 Usable Models Use of M&S is limited by the availability of usable models. When simulation tools are available, it is often not feasible to use these tools for a specific application because it would be too costly and time-consuming to build the models for the simulation. In most cases, behavioral models for equipment (and processes) are required as well as geometric models. These behavioral models are usually not available. This particular enabler deals with the availability of models when they exist in some form or could be easily constructed. The development of new models, requiring new technology, is included under Improved M&S Tools. The availability of usable models can be significantly enhanced by: 1) establishment of national libraries, 2) delivery of product models with equipment and hardware, and 3) use of enhanced distribution methods. It would be extremely valuable if these models were compatible with an integrating framework (see below). Definition and Purpose In this paper the term model is applied to geometric (and logical) structures representing a physical object, as well as to physics models to describe the behavior of a physical object during a process such as casting, forging, forming, etc. In either case, the use of M&S could be dramatically increased if the all the models currently known were made available to the nations engineering community. The establishment of national libraries of verified models will provide a resource that will decrease the time to apply M&S tools and increase the use of these tools. It is often not feasible to use these tools because it would be too costly and timeconsuming to build the models for the simulation. In certain cases, it is faster to set up the automation line and use it as a testbed than to construct the models and run the simulation. Often, it is cheaper to build mock-ups and use trial-and-error methods. The availability of models can be further enhanced by delivery of models with commercial equipment. These models can be provided as a service, or as a additional cost option.
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Libraries of Usable Models There are enablers that will foster establishment of national libraries. These include a systematic method to catalog the models, standards for the models themselves, verification methods, validation methods, and accreditation procedures. If models were all accessible from a single source, the availability problem would not be solved there must be a way to locate the needed file. A catalog system is thus necessary to store and retrieve specific models. The models must also be verified, validated, and accredited, which could be done by an impartial third-party organization for models input to the library by vendors and developers. Standards must also be developed and put in place to make the models in the library usable. Product Models with Hardware Another means to make models available for M&S applications is to have geometric (CAD) models and behavioral models available from the vendor of the product. The behavioral models will probably be product dependent. These models can be an option provided for an additional fee, or part of the basic purchase package. In certain cases such models are created in the product development process and could easily be made available. It is common practice to provide paper drawings with products, and including models is a logical extension of that practice. Enhanced Distribution Methods Current communication technologies can significantly assist the process of making validated, verified models available. Information brokers currently assist companies in forming and managing virtual enterprises. They design, administer, maintain, update, secure, and adapt the information system. They maintain databases of all users and all the information each is allowed access. In certain cases, they manage and support the computers and networking of the individual companies. Such brokers can provide similar services to support M&S. They can gather and assemble the models required for a given analysis, and may also provide M&S services. Current State of the Art/Best Practice At present, there is no national system for sharing and maintaining models and simulations. It is believed that such a capability does not exist at individual companies. There is limited sharing and maintenance of models and simulations within a specific application set, but this is usually an ad hoc process. Pilots/Emerging State-of-the-Art Extensions The DoD Modeling and Simulation Master Plan calls for Resource Repositories and Communications to support M&S. It specifies a networked distributed system to provide a means to share and maintain models, simulations, data, metadata, algorithms, and tools; and a reliable communications infrastructure with capacity to support M&S. The Master Plan also directs the DoD Components to develop an approach to VV&A that is appropriate for models and simulations within their purview. Future Stretch Goals Models will be easily accessible on national networks. Search engines will provide a capability for users to identify needed models that are needed. Models will be provided with specified VV&A levels. 4.2 Improved M&S Tools Definition and Purpose Improved M&S tools are required to enable more accurate and sophisticated analysis of enterprises, business processes, plants, equipment, operations, products, and processes. These tools will contain more accurate mathematical representations of physical reality, better cost analysis methods that span the product life-cycle, more robust manufacturing process models, high level product models, and user interfaces. These tools must be affordable by small and medium sized companies. Three specific areas require improvement: 1) physical models, 2) user interfaces, and 3) design documentation and change coordination.
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Accurate representations of physical reality are necessary if tools are to be useful. Full understanding, with the ability to mathematically represent processes and product interactions, will continue to need research and development. Robust models need to be developed in which equipment, material, and process data are characterized by equations that reflect realistic operating conditions as opposed to single discrete values for properties. Assembly modeling needs further development. Models to accurately reflect the cost of designing, fabricating, supporting, and disposing of products must be developed. It is extremely difficult to develop explicit process-based cost models. Methods to obtain and share accurate cost estimates for individual processes are needed. Development of tools for modeling vendor capabilities and operational performance is needed to enable distributed product development. Enterprise-level modeling and IPPD maturity model (self assessment) tools also require development. User-friendly interfaces for M&S tools are key to involving customers in the development process. This also enables reduction in training and operations costs. The user interface includes promoting understanding of the results as well as input of requirements. Advanced visualization techniques and virtual reality may play a prominent role. In the design of a complex system, understanding the impact of a change (due to customer specifications, new market needs, etc.) is a major challenge. Frequently changing work teams comprising many people and organizations, adds to the challenge. Each individual must maintain situational awareness. This barrier becomes even more important as we move toward distributed, multi-organizational projects and virtual enterprises that operate with many geographically dispersed partners. Coordination services must be active. Some of the most promising design documentation systems focus on facilities for dependency maintenance and for producing sharable, self-explaining design models and process simulations. Current State of the Art/Best Practice The current best practice involves use of commercial software packages for design and analysis, with the results presented using computer graphics. Virtual reality is used in certain applications, but broad usage is limited by the cost of the technology. Product data managers (PDMs) provide product design documentation management and change coordination after the initial product definition. The use of PDMs has not been extended forward to the initial concept phase of the product development process. Pilots/Emerging State-of-the-Art Extensions There are a number of notable projects at companies, consortia, universities and national laboratories to develop improved physical models. There are too many to enumerate here. Research and development of general user interfaces is being accomplished in universities and in industry. Future Stretch Goals Robust models of manufacturing equipment, materials, and processes that reflect operating conditions will be widely available. Models will accurately reflect the cost of designing, fabricating, supporting, and disposing of products. Modeling and simulation tools, integrated with advanced visualization systems, including virtual reality, will provide realistic and accurate depictions. 4.3 Integration Technologies Two integration technologies are critical to M&S: standards for models, and integrating frameworks for applications. Integrating frameworks must also follow standards, which are themselves an enabler. Integration of data, models, and applications must be accomplished to enable real-time tradeoffs in the development process. The issue of integration in general is covered in detail in the Adaptive, Responsive Information Systems imperative paper. Integration is included here because it is a key enabler for all of the other M&S Enablers. M&S will require an infrastructure similar to (or possibly identical to) the infrastructure that supports IPPD and actual production. The existence of standards and translators for product definition will facilitate the availability of usable models. Integrating frameworks are necessary to develop and apply improved M&S tools, and development of new models will require development of standards to support them. Innovative concepts will draw from and require support from integration technologies.
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Definition and Purpose The purpose of standards is to facilitate creation of complex systems out of transforming modules. Standards to support M&S are almost identical to the standards for the NGM enterprise information system. Standards will be required for product data, including task and production plans, process data and knowledge, distributed objects, communications, text, images, video, sound, and modeling. While many standards for these exist, none is generally accepted as yet for a particular topic. Standards and translators for product definition will facilitate the availability of usable models. They will ensure that a model completed in a CAD package can be used in an analysis package, and that models developed in legacy systems can be accessed for other applications. Standards are required for such items as process information and knowledge simulations. M&S will require information systems that integrate across disciplines, vendors, customers, etc., and are accessible through the National Information Infrastructure. An integrating framework is a suite of software modules that provide: 1) connectivity and communication at all levels, from a physical link to object message passing; 2) data, information and knowledge management; and 3) access, creation, editing, composition, enactment, monitoring, and control of all entities in the system, including transforming modules and their interfaces. An integrating framework or infrastructure will allow different classes of users to integrate functions, applications and data in a dynamic heterogeneous environment. This will enable production of simulation applications customized to specific users and processes. Software for manufacturing process simulation is typically expensive to develop, infrequently results in reusable code, and is difficult to maintain. Integrating frameworks will reduce the cost of software development and increase use of M&S among large and small manufacturers. Current State of the Art/Best Practice See the Imperative paper on Adaptive, Responsive Information Systems. Pilots/Emerging State-of-the-Art Extensions See the Imperative paper on Adaptive, Responsive Information Systems. Future Stretch Goals See the Imperative paper on Adaptive, Responsive Information Systems. 4.4 Hybrid Prototyping Definition and Purpose The ultimate goal of virtual prototyping is to eliminate the need for hardware prototypes. Virtual prototyping requires that all aspects of the behavior of the components and the system are well understood and can be modeled. This goal will not be achieved in the near term in most industries. Hybrid prototyping provides a means to approach this goal while enhancing product and process development. Hybrid prototyping involves coupling digital representations (models) with physical devices to simulate the complete behavior of the system. This allows use of a hardware component (where no suitable model exists) in a simulation. The total system can then be modeled and analyzed. Hybrid prototyping also provides for systematic integration of software and hardware, where components can be added in stages, with modeling and analyzing performance at each stage. It also enables development and training in situations where certain components pose a safety hazard or are too costly to operate. The operator can use the actual controls of a machine, but the performance of the machine will be simulated. Hybrid prototyping also provides another tool to enable model validation and verification. Current State of th Art/Best Practice Commercial software is currently available to support hybrid prototyping. In general, these tools are used for systems integration rather than product development.
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Pilots/Emerging State-of-the-Art Extensions The National Institute of Standards and Technology (NIST) National Advanced Manufacturing Testbed (NAMT) provides a means to conduct distributed and hybrid manufacturing. NAMT researchers are developing the scientific basis and technical underpinnings necessary to achieve manufacturing environments that are shared, accessible, integrated, and information-based. The research focuses on measurements, communications protocols, interfaces, and other standards and infrastructure technologies. Future Stretch Goals The ultimate goal for hybrid prototyping is for a full capability to do virtual prototyping, while retaining the flexibility to add hardware into the loop for specialized testing. 4.5 Innovative Design Concepts Innovative design concepts are needed to enable M&S to be used throughout the NGM enterprise. Fundamental advances in representation and modeling are required to integrate multiple levels of simulation (discrete, geometric, physical) to perform trade-offs in product design, materials, manufacturing processes, and plant and equipment configuration. Better computational prototyping and modeling tools are needed to support the initial, conceptual phases of design. New design tools are needed to evaluate manufacturing processing alternatives. Software engineering methodologies for developing complex simulation environments to support the rapid development of new simulations are needed. Alternate design concepts that incorporate collaborative design methodologies and technologies must be developed. All of these advances must reduce complexity in M&S processes. Definition and Purpose The previous enablers focused on enhancements, extensions, implementations, etc. to transition to the NGM company. However, new concepts and methodologies are needed to reach the state of full virtual production. Innovative design concepts that address model representation, processing alternatives, and alternate design concepts are needed. The development of M&S information broker capabilities will help foster the broadbased M&S industry. Model representation refers to the manner in which the real-world problem is encoded within a computer's memory. The important point is that model representation is not just a matter of efficiency it determines to a great degree if a given simulation is practical to perform. Carefully matching computer representation to the problem being solved can impact execution time by 3, 4, or more orders of magnitude. This can translate to a 1,000 fold, 10,000 fold, or more decrease in computation time. This kind of gain can quickly dwarf the factors of 2 improvement that are being given to us by chip makers focus on faster CPUs. Better computational prototyping and modeling tools are needed to support the initial, conceptual phases of design. Such tools must operate at the abstract level, supportingcost-effective problem-solving techniques and providing rough predictions from indefinite design parameter values. Tools are needed to evaluate processing alternatives. New design processes are needed that incorporate fabrication process trade-offs, product life-cycle analysis, and disposal considerations. More accurate models of downstream concerns (producibility, reliability, maintainability, application flexibility, total life-cycle cost) are also required. Alternate design concepts that incorporate collaborative design methodologies and technologies must be developed. These must address the social aspects of team dynamics in a product development setting, as well as design technology. Information brokers currently assist companies in forming and managing virtual enterprises. They design, administer, maintain, update, secure, and adapt the information system to support these enterprises. They maintain databases of all users and the information that each is allowed to access. They provide enterprise data management and can provide similar services to support M&S. For instance, the information broker can gather and assemble the models required for a given analysis. They could serve as an agent to provide VV&A for models and tools, and may also provide actual M&S services. Capabilities must be developed to support
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and foster this industry. Issues of security, privacy, and user identification and verification must be addressed. Methods to identify resources must be developed (see Section 4.1 above). Current State of the Art/Best Practice Current tools are available to evaluate individual processes. These usually do not consider product life-cycle analysis and disposal, nor do they support trade-offs of alternative processes. Software and hardware to support collaborative design are currently available. Product data managers provide tools for configuration management and workflow. In general, these tools are incorporated into the existing development process. Information brokers currently assist companies in forming and managing virtual enterprises. Pilots/Emerging State-of-the-Art Extensions Most of the development of innovative design concepts to date has focused on supporting technologies and their integration into existing design processes. There is a need for work focused on the design concept itself. Future Stretch Goals The entire NGM enterprise, spanning multiple organizations, will be modeled and simulated prior to production. Trade-offs will be made at all levels to optimize the product design, the plant, the equipment, and the production processes. This goal will require new M&S concepts and methodologies as well as improved tools and integration technologies.
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5.0 ACTION PLAN RECOMMENDATIONS Making all production decisions on the basis of computer models and simulations will require that all the M&S enablers previously identified are developed and implemented. The following action recommendations do not address all of the enablers, but identify key activities that will achieve the most important of these enablers and support the others. These key activities are: 1. 2. 3. 4. 5. The number of existing models must be increased The models must be made available in an organized fashion Integrating frameworks must be developed to simplify the use of M&S tools Methods must be provided to verify, validate and accredit the models for use Innovative M&S concepts must be developed.
It is important to note that the initial emphasis involves the availability of data models, and the integrating frameworks. These enablers will significantly increase use of current M&S tools and algorithms. These tools are currently under-used due to the lack of time to develop data models. The next emphasis is on VV&A for the models. However additional R&D is required to reach the state of virtual production. In particular, new design concepts are required to integrate multiple levels of simulation (discrete, geometric, physical) to enable trade-offs in product, material, process, and equipment. 5.1 Usable Models 5.1.1 Provide Product Models with Hardware Table 5.1.1-1 summarizes actions that government, industry, and the academic community can take to make product models a standard deliverable in product packages. This action that will significantly increase the availability of models in the near term. Industry and government should strongly encourage this practice. Models should be responsive to a variety of product characteristics/specifications (e.g., tolerances, materials, environment, etc.). Companies should strive to make these available. This can be as option for an additional fee, or part of the purchase package. In certain cases such models are created in the product development process and could easily be made available. It is common practice to provide paper drawings with products, and providing models is a logical extension of this practice. Companies that need such models should make this need known to vendors and establish (negotiate) the cost for these models. The government can promote this practice by requiring that the models be included in government purchases. Table 5.1.1-1. Recommended Actions to Promote Product Model Availability
Sector Industry Near-Term Vendors provide models w/ hardware (parts, components, equipment, etc.) Users exploit procurement process to hasten model availability Specify models be provided in appropriate projects Develop alternatives & potential standards for models Mid-Term Establish standards for models Far-Term Require models be provided w/ hardware
Government Academia
Facilitate development of standards for computer models
Require models be provided w/ government hardware
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5.1.2 Develop National Libraries of Usable Models Table 5.1.2-1 summarizes actions that government, industry, and the academic community can take to drive the establishment of national libraries that provide easy access to models and promote further development of modeling and simulation. Model libraries will require a systematic method to catalog the models, standards for the models themselves, verification methods, validation methods, and accreditation procedures. Standards are necessary to make the models in the library usable. Table 5.1.2-1. Recommended Actions to Support Development of National M&S Libraries
Sector Industry Government Academia Near-Term Use current technology to make existing models available Mid-Term Encourage establishment of M&S Information Services Brokers Encourage establishment of M&S Information Services Brokers Develop (w/ Industry & Government) a catalog system for computer models Far-Term Rely on market forces to maintain & extend libraries Rely on market forces to maintain & extend libraries Research VV&A methods
These libraries should contain industry standard models, such as product functional models (gears, joints, mechanisms, electronic circuits, components), manufacturing process models (plastics, composites, metal forming), workflow models (engineering change orders, order processing), environmental models, and standard geometry models (including features, constraints, tolerance schemes. Use Current Technology to make Existing Models Available Current information and communication technology provide numerous methods to make existing models available. The first step is to use these technologies to make existing models available. Develop Catalog System for Computer Models Once models have been made available, means to locate a specific model must be provided. A catalog system is necessary to store and retrieve specific models. Develop Formal Verification, Validation and Accreditation Methods Initially models are made available on a caveat emptor basis. If these models can be verified, validated and accredited they become much more useful and valuable. Encourage the Establishment of M&S Information Services/Brokers If accomplished, the previous steps will create value in models and a market for models. Support Standards for M&S Libraries All of the above actions will be enhanced by the identification of standards. 5.2 Develop Improved M&S Tools Table 5.2-1 summarizes actions that government, industry, and the academic community can take to promote development of improved M&S tools, which are required to enable more accurate and sophisticated analysis of enterprises, plants, equipment, products and processes. Three specific areas require action: 1) physical models, 2) user interfaces, and 3) design documentation and change coordination. Better Physical Models Extend the coverage of commercial software tools to address current weaknesses in the product/process life cycle including tools for embedding customer requirements and market analysis, planning and execution aids, and process optimization into the development process.
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Table 5.2-1. Recommended Actions to Stimulate Development of Improved M&S Tools

Sector Industry Near-Term Mid-Term Far-Term Develop models to accurately reflect costs of designing, fabricating, supporting & disposing of products Develop tools for modeling vendor Develop models to accurately reflect capabilities & operational performcosts of designing, fabricating, supance porting & disposing of products Develop user Interfaces that promote understanding & use of engineering tools Transfer M&S technology (as well as existing models) to industry Continue/extend research to mathematically represent manufacturing processes Develop advanced computational methods for manufacturing processes Research advanced visualization techniques for M&S results presentation
Government
Academia
Enhanced User Interfaces Enhanced user friendly interfaces for M&S tools are required to involve customers in the development process, to provide training for operations and the tool itself, and to promote understanding of the results as well as input of requirements. Design Documentation and Change Coordination Design Documentation and Change Coordination must be extended to the concept phase of the product development process. This includes, understanding the impact of a change (due to customer specifications, new market needs, etc.) on the product and production, maintaining the awareness of all involved individuals and organizations, and coordinating the development activity. 5.3 Develop Integrating Technology Frameworks Table 5.3-1 summarizes actions that government, industry, and the academic community can take to support development of the enabling integration frameworks required in the NGM modeling and simulation environment. The frameworks must provide an environment to rapidly develop new models and simulations, as well as to integrate existing tools, and include 1. Connectivity and communication at all levels from a physical link up to object message passing 2. Data, information and knowledge management 3. Access, creation, editing, composition, enactment, monitoring and control of all entities in the system including transforming modules and their interfaces. This framework will permit different classes of users to integrate functions, applications and data in a dynamic heterogeneous environment. This will enable the production of simulation applications customized to specific users and processes. Table 5.3-1. Recommended Actions to Promote Product Model Availability
Sector Industry Near-Term Develop specific requirements (including existing standards) that integrating frameworks must meet Continue to support development of integrating frameworks for manufacturing Mid-Term Establish standards for integrating frameworks Facilitate development of standards Develop new integrating frameworks & technologies to support integrating frameworks Far-Term
Government
Academia
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5.4 Hybrid Prototyping Techniques Hybrid prototyping couples the modeling and simulation world of virtual prototyping with the capabilities of Rapid Product/Process Realization (RPPR) discussed in Volume II, Imperatives for Next-Generation Manufacturing . The application of modeling and simulation tools to produce complete computer based representations requires the maturation of solid modeling techniques, the marriage of process modeling with process data, and the integration of the geometric and process modeling system. Actions to move to this environment are shown in Table 5.4-1. Table 5.4-1 Recommended Actions to Stimulate Development of Hybrid Prototyping
Sector Industry Government Academia Near-Term Support shared access to process models & data Support development of geometric & process modeling systems Extend state of art in geometric modeling & standard product data access; mature process modeling capabilities Mid-Term Develop and support systems for integration of product & process Support integration of product & process modeling & standard data representation Extend process modeling & data integration to broader processes Far-Term Integrate virtual & physical prototypes into model-based testing Develop & mature standards for generic process models Extend & integrate use of virtual & hardware prototypes in product development & verification
5.5. Develop Innovative Design Concepts Table 5.5-1 summarizes actions that government, industry, and the academic community can take to stimulate development of innovative design concepts, which are needed to enable M&S to be used on a large scale throughout all business functions of the enterprise. The development of such concepts requires: fundamental advances in representation and modeling; better computational prototyping and modeling tools to support the initial, conceptual phases of design; tools to evaluate manufacturing processing alternatives; software engineering methodologies for developing complex simulation environments; and alternate design concepts that incorporate collaborative design methodologies and technologies. Highlights of each of these requirements include: Fundamental Advances in Representation and Modeling Fundamental advances in representation and modeling are needed to integrate multiple levels of simulation (discrete, geometric, physical) to enable virtual product/process/equipment validation. Table 5.5-1. Recommended Actions to Stimulate Development of Innovative Design Concepts
Sector Industry Near-Term Promote, develop, & implement integrated design and manufacturing system Promote & support R&D efforts that support integrated, concurrent design and manufacturing Mid-Term Far-Term Develop design tools to evaluate manufacturing processing alternatives Support & research modeling Support & research fundamental tools to support initial, conceptual advances in representation and phases of design modeling to integrate multiple levels of simulation to enable virtual production Research modeling tools to supFundamental advances in repreport initial, conceptual phases of sentation & modeling to intedesign grate multiple levels of simulation to enable virtual production
Government
Academia
Develop alternate design concepts that incorporate collaborative design methodologies & technologies Develop software engineering methodologies for complex simulation environments
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Develop Tools to Support Conceptual, Initial Phase of Design Better computational prototyping and modeling tools are needed to support the initial, conceptual phases of design. These design tools need to provide the capability to evaluate basic technology system approach as well as manufacturing processing alternatives. Software Engineering Methodologies Software engineering methodologies for developing complex simulation environments to support the rapid development of new simulations are needed. In certain cases it is necessary to develop modeling and simulation tools in the development process to analyze a new manufacturing process. Simulation environments provide a way to rapidly develop this capability. Alternate Design Concepts Alternate design concepts that incorporate collaborative design methodologies and technologies must be developed. These must address the social aspects of team dynamics in a product development setting, as well as design technology.
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6.0 METRICS As noted earlier, the cost of developing, implementing, and maintaining modeling and simulation capabilities and tools is a major barrier to their widespread dissemination and use throughout the manufacturing industry. However, fundamental advances in the technology, coupled with continuing cost reductions in information systems infrastructure and computing power, offer significant potential for affordability enhancements. The concept of a national library of M&S information, tools, and simulations also offers great potential to reduce the cost of these assets and making them more affordable for all manufacturers, including small and medium-sized firms advances. Notwithstanding these future advances in capability and affordability, every company must make its M&S technology investment decisions based on full consideration of cost and benefits. Suggested metrics for companies to use in evaluating M&S investment decisions, and assessing the benefits of those investments, include: Impact on innovation: rate and quantity of new product and service offerings resulting from M&S application Customization: Increased ratio of customized to standard orders enabled by M&S tools Average annual time reduction in product realization processes (through replacement of build-and-test techniques with simulations) The skill scope of core people: Average number of skills of core people in terms of M&S capabilities Effectiveness: Number of modeling and simulation processes employed in product realization process Pervasiveness: Number of verified, validated and accredited models that deployed throughout the enterprise Time to create/establish a new product line.
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7.0 SOURCES
1. Appley, George W. and Gallalaher, Mark W. A Framework for Manufacturing-Process Simulation Software, Object Magazine, 2. Coy, Peter and Hof, Robert D. 3-D Computing, Business Week, 4 September 1995. 3. Defense Modeling and Simulation Office (DMSO). Modeling and Simulation Master Plan, October 1995. 4. Defense Modeling and Simulation Office (DMSO). DMSO VV&A Recommended Practices Guide 96, July 1996. 5. Defense Modeling and Simulation Office (DMSO). DoD High Level Architecture, August 1996. 6. Khosla, Pradeep K. Tools for Design, Manufacturing, and Integration, Internal Paper, July 1996. 7. National Research Council. Information Technology for Manufacturing: A Research Agenda, National Academy Press, 1995 8. National Center for Advanced Technologies (NCAT). Technology for Affordability A Report on the Activities of the NCAT Working Groups , January 1994. 9. National Center for Manufacturing Sciences (NCMS). NCMS Collaborative Manufacturing Agenda, April 1996. 10. National Electronics Manufacturing Framework Committee. Electronics Manufacturing Technology Roadmaps and Options for Government Action, December 1994. 11. Office of Science and Technology Polic., National Critical Technologies Report, March 1995. 12. Scaringella, Sal and Erickson, Paul.. Enterprise Integration Assessment Tool and Reference Base Cases in IPPD, Proceedings of the Fifth National Agility Conference, March 1996. 13. Upton, David M. and McAfee, Andrew, The Real Virtual Factory, Harvard Business Review, July-August 1996.
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Adaptive, Responsive Information Systems

January 1997
Prepared By: The NGM Engineering Tools Thrust Team
N E XT - G E N E RA T I ON M A N U F A C T U RI N G PROJ E C T
CONTRIBUTORS Steve Holland, General Motors, Team Leader John J. Mills, Agile Aerospace Manufacturing Research Center, University of Texas at Arlington, Lead Author Neil Christopher, National Institute of Standards & Technology, Lead Author Doug Braithwaite, Massachusetts Institute of Technology Paul Erickson, Sandia National Laboratories Cecil Schneider, Lockheed Martin Corporation
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The NGM Framework

Global Drivers
iv
N E XT - G E N E RA T I ON M A N U F A C T U RI N G PROJ E C T Teaming as a Core Competency The NGM Company will team within and outside the company to acquire and focus needed knowledge and capabilities to develop, deliver, and support its products and services. Responsive Practices and Cultures The NGM Company will continuously evolve core competencies, organizational structure, culture, and business practices, enabling it to anticipate and respond rapidly to changing customer demands. Key enablers to attain these attributes and surmount the inevitable barriers and dilemmas along the way are defined as Imperatives, from which arise specific Action Recommendations that can be acted upon to move toward the next generation. The 10 Imperatives identified as essential to the realization of NGM Companies and NGM Enterprises are as follows: People-Related Imperatives: Workforce Flexibility Knowledge Supply Chain Business Process-Related Imperatives: Rapid Product/Process Realization Innovation Management Change Management Technology-Related Imperatives: Next-Generation Manufacturing Processes & Equipment Pervasive Modeling and Simulation Adaptive, Responsive Information Systems Integration-Related Imperatives: Extended Enterprise Collaboration Enterprise Integration This document, a part of Volume II Imperatives for Next-Generation Manufacturing of the NGM Project Report, draws extensively on data and information developed in the other areas of the report notably Volume III, Digest of U.S. Industry Roadmaps, and Volume IV, Views of the Future. Those individuals who read this Imperative paper as a stand-alone document should also review Volume I, Summary Report, which provides a broad overview of the NGM concept as well as a top-level integrated presentation of all NGM Imperatives and their supporting Action Plan recommendations.

N E XT - G E N E RA T I ON M A N U F A C T U RI N G PROJ E C T The NGM Imperatives in Context Some companies have some NGM attributes to varying degrees today, but none is close to mastering them all. To thrive, or even survive, by the usual measures of sustained profitability and customer, workforce, and shareholder satisfaction, todays manufacturing company will have to make a complex transition. It must learn to operate in a rapidly, ever-changing global economy and respond to increasingly demanding social and environmental responsibilities. The NGM Imperatives are key to meeting these challenges. They are applicable to most industries, whether batch- or process-oriented, servicing commercial, consumer, or military markets; and are as applicable to a small company as to a large one. In fact, implementation in a small company may be easier, since fewer people and functions are involved. They are not, however, not all-inclusive. As an example, they do not address: 1) company capabilities already widely assumed as conditions of doing business, such as world-class quality or environmental responsibility; or 2) resolution of macro-issues such as population demographics and migrations or finite limitations of the biosphere. Although these topics must be considered in planning for implementation of the Imperatives, they are already widely addressed in programs and forums outside the immediate realm of manufacturing . Over time, as the actions suggested in the NGM Imperative papers are implemented, the people, business processes, and technologies of the Company will evolve into a dynamic network of integrated work units, each of which can be represented as an NGM enterprise as shown below. The figure also illustrates the overarching need to simultaneously address all actions with a unified approach to People, Business Processes, Technology, and Integration the four elements of the NGM model. No single Imperative can help a company realize more than limited progress toward any one NGM Attribute. Each of the Imperatives provides inputs to, and leverages the outputs of, multiple Attributes as indicated in Table I on the following page. Likewise, each of the Imperatives is strongly interdependent with multiple other Imperatives (see Table II on the following page). The NGM Company must therefore incorporate aspects from multiple Imperatives simultaneously while balancing the realtime needs and resource constraints of the organization.
People
The NGM Company

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N E XT - G E N E RA T I ON M A N U F A C T U RI N G PROJ E C T Table I. Impact of Imperatives on Achieving NGM Attributes

H L M H H H H M L M
H H H H H M L M M H
H L H H H M H H H H
H H H H H M M M H H

* H M M H M M H H H
H * M M
M M * H H
H H M * H
H M M H *
M M H H H
M M H M
H H
H H H
H H H
M - Medium Impact
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H H H M
Impact On
Change Management

H M M H H M L M H H
N E XT - G E N E RA T I ON M A N U F A C T U RI N G PROJ E C T This is especially true when Imperative implementation is tailored for: A specific industry The size, type, and complexity of the business itself The companys position in its supply chain(s) The education and skills of the companys workforce. The maturity level of the business processes and technologies needed for the business to thrive. In contemplating implementation, the view of the NGM framework must be expanded to illustrate the inclusion of needs assessment at the strategic, operational, and tactical levels, as shown at right. The NGM Enterprise Operational Strategies Within the NGM framework, the enterprise Attributes define the broad scope of the strategic vision, as is discussed in Volume I, Summary Report. Most companies translate company strategic visions, missions, goals, and objectives to operational strategies and apply them tactically. In like manner, the NGM Imperatives represent the operational and tactical strategies for attaining NGM Attributes. To an individual company, this means that Imperative implementation actions would most likely have to be integrated into specific strategies for key operational functions of the enterprise, such as: Market Development Portfolio Management Technology Product Development Product Life Cycle Process Development Environmental Innovation Sourcing/Teaming Individual companies apply the NGM integrated four-cornerstone approach (people, business processes, and technology) at their strategic, operational, and tactical levels.
Global Drivers
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N E XT - G E N E RA T I ON M A N U F A C T U RI N G PROJ E C T Table III. Relationship of NGM Imperatives to Operational Strategies

Investment/Finance
Technology
X X X X
X X X X X
X X
X X
X X X X X
X X X X X X X X X X
X X X X X
X X X X
X X X
X X X X X X
X X X X X X
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Knowledge Supply
Product Life Cycle
Human Resources
Sourcing/Teaming
Environmental
Innovation
CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 Imperative Definition ............................................................................................................................. 2 2.0 Relationship to NGM Attributes ........................................................................................................... 3 3.0 Barriers to Implementation .................................................................................................................... 4 4.0 Enablers to Overcome Barriers ............................................................................................................... 6 4.1 Basis Model ...................................................................................................................................... 7 4.1.1 Purpose ................................................................................................................................... 7 4.1.2 Traditional State of the Art/Best Practices ............................................................................... 7 4.1.3 Current State of the Art/Best Practices .................................................................................... 7 4.1.4 Pilots/Emerging State-of-the-Art Extensions ........................................................................... 9 4.1.5 Future Stretch Goals ............................................................................................................... 9 4.2 Standards.......................................................................................................................................... 9 4.2.1 Purpose ................................................................................................................................... 9 4.2.2 Traditional State of the Art/Best Practices and Current State of the Art ................................ 10 4.2.3 Pilots/Emerging State-of-the-Art Extensions ......................................................................... 11 4.2.4 Future Stretch Goals ............................................................................................................. 11 4.3 Communications and Networking Technology .............................................................................. 11 4.3.1 Purpose ................................................................................................................................. 11 4.3.2 Traditional State of the Art/Best Practices ............................................................................. 12 4.3.3 Current State of the Art/Best Practices .................................................................................. 12 4.3.4 Pilots/Emerging State-of-the-Art Extensions ......................................................................... 13 4.3.5 Future Stretch Goals ............................................................................................................. 14 4.4 Integration Frameworks .................................................................................................................. 15 4.4.1 Purpose ................................................................................................................................. 15 4.4.2 Traditional State of the Art/Best Practices ............................................................................. 15 4.4.2.1 NIST/ECMA Reference Model ............................................................................ 16 4.4.2.2 CAD Frameworks Initiative .................................................................................. 18 4.4.2.3 Others................................................................................................................... 19 4.4.3 Current State of the Art/Best Practices .................................................................................. 19 4.4.3.1 SEMATECH ........................................................................................................ 20 4.4.3.2 Defense Information Infrastructure Common Operating Environment ................ 22 4.4.4 Pilots/Emerging State-of-the-Art Extensions ......................................................................... 25 4.4.4.1 National Industrial Information Infrastructure Protocol ....................................... 25 4.4.4.2 Simulation Assessment Validation Environment ................................................... 25 4.4.4.3 Infrastructure Services Architecture for Rapid Response Manufacturing ............... 26 4.4.4.4 Data Integration and Synergistic Collateral Usage Study....................................... 26 4.4.5 Future Stretch Goals ............................................................................................................. 27 4.4.5.1 NIST National Advanced Manufacturing Testbed Framework Project ................. 27 4.4.5.2 Systems Integration Architecture Project ............................................................... 29 5.0 Action Plans ......................................................................................................................................... 31 6.0 Sources ................................................................................................................................................. 34
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ACRONYMS & ABBREVIATIONS ADA AP API ASIC ATE ATM CAD CFI COE CORBA COTS DCE DISCUS DISM DoD DOE DXF ECMA EDA GIF GOTS HTML http IDL IEEE IF IGES IPPD IPSE ISDN ISO JAST JPEG MDF MEL MES MRP NAMT NGM NIIIP Advanced Defense Architecture application protocol application programming interface application-specific integrated circuit Atherton Tool Environment asynchronous transfer mode computer-aided design CAD Frameworks Initiative Common Operating Environment Common Object Request Broker Architecture commercial off-the-shelf Distributed Computing Environment Data Integration and Synergistic Collateral Usage Study Department of Information Systems Management U.S. Department of Defense U.S. Department of Energy data exchange format European Computer Manufacturers Association Electronic Data Access graphic image file government off-the-shelf Hypertext Markup Language hypertext transmission protocol Interface Definition Language Institute of Electronic & Electrical Engineers integration framework Initial Graphic Exchange Standard integrated product/process development integrated product support environment Integrated Services Digital Network International Standards Organization Joint Affordable Strike Technology Joint Photographic Experts Group Meta Data Format NIST Manufacturing Engineering Laboratory Manufacturing Execution Systems manufacturing resource planning National Advanced Manufacturing Testbed Next-Generation Manufacturing National Industrial Information Infrastructure Protocol
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N E XT - G E N E RA T I ON M A N U F A C T U RI N G PROJ E C T NIST NSF OLE OMA OMG ORB OSI PCTE PDES PDF PLI POP PPP PRP RAASP RTF SAVE SDAI SDE SDF SEI SEMATECH SGML SIA SPPDB SQL STEP TA TAFIM TAS TCP/IP TEAM UIUC VLSI National Institute of Standards & Technology National Science Foundation Object Linking and Embedding Object Management Architecture Object Management Group Object Request Broker Open Systems Interconnect Portable Common Tool Environment Product Data Exchange Specification portable document format Programming Language Interface point of presence point-to-point protocol product realization process Rapid Prototyping of Application Specific Signal Processors rich text format Simulation Assessment Validation Environment Standard Data Access Interface SAVE Development Environment Standard Delay File format Software Engineering Institute Semiconductor Manufacturing Technology Standard Graphical Markup Language Systems Integration Architecture SAVE Product/Process Database Subject Query Language Standard for Exchange of Product Model Data Technical Architecture Technical Architecture for Information Management Technical Architecture Specification Transmission Control Protocol/Internet Protocol Technologies Enabling Agile Manufacturing University of Illinois, Urbana Champaign very large-scale integrated
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EXECUTIVE SUMMARY Adaptive, responsive information systems are information systems that can be reshaped dynamically into new systems by adding new elements, replacing others, and changing how modules are connected to redirect data flows through the total system. Why is it Important? While rapid evolution of information systems technology is providing companies with a powerful array of business tools, this same evolution is creating new challenges that companies must address to succeed in an increasingly global marketplace where information is fast becoming the only remaining source of sustainable competitive advantage. How can companies quickly integrate their systems with those of partners, suppliers, and customers to form distributed, extended enterprises to compete for a fast-breaking opportunity? How can companies make information infrastructure investments that will not become obsolete in a few months or a year? To meet these challenges, the NGM enterprise must move from a monolithic information system (using a central database in a neutral format) to a ubiquitous service approach in which modules anywhere on the net can be reconfigured in moments to act on data anywhere on the net. The nations industries must move from the current proliferation of proprietary formats and competing standards to a suite of uniform data exchange standards that enable modules to be rapidly interconnected to form integrated, robust information systems. Key Concepts Adaptive, responsive information systems are achieved by Changing the accepted paradigm to information system design and implementation Creating software function modules that can reside anywhere on the net and be readily configured into new systems with standardized data interfaces Establishing uniform standards for the data interfaces Establishing high-speed communication links and supporting standard protocols Developing a framework or infrastructure that allows users with different authorizations to readily and easily create, modify, compose, and enact individual modules and configured systems. Each component in the modular system must be highly specialized to maximize performance, and must rely on shared services to reduce system complexity. Whats New? Paving the way to this change are emerging frameworks and research and development projects such as the National Industrial Information Infrastructure Protocol (NIIIP) project at IBM, the Simulation Assessment Validation Environment (SAVE) project at Lockheed Martin, the Systems Integration Architecture at the Agile Aerospace Manufacturing Research Center, the Systems Integration for Manufacturing Applications Project at the National Institute for Standards and Technology, and a variety of industry-specific ventures. Object-oriented component software that is frequently re-used, and autonomous or responsible agents, will be far more prevalent than today. The World Wide Web will become much more than just a novelty, providing unparalleled, easy access to necessary data and information anywhere in the world, as well as within a single organization. Self-configuring modules that know about each others interfaces will be able to configure a new information system dynamically.
1.0 IMPERATIVE DEFINITION A next-generation manufacturing information system is defined as the collection of computer hardware, software, data, and communications links (both within the organization and to the external environment) that enables and supports the business, engineering, production, and logistics processes within the constraints of the business culture, reward structure, and organization. To allow NGM Companies and Enterprises to rapidly respond to customers increasingly sophisticated needs by reconfiguring their business, design, and production systems and their human resources, a responsive, adaptable information system using new approaches will be mandatory. Information systems supporting NGM Enterprises must have the same structure and behavior as the individuals and organizations that are expected to use these systems. They must not be the weak link in the responsiveness chain. They must facilitate the responsive behavior of the organization which will fall into a spectrum anchored at the ends by large, highly automated, dedicated manufacturing organizations and small, highly agile, virtual manufacturing organizations. The NGM Companies must move from a monolithic information system using a central database in a neutral format to a ubiquitous service approach in which modules (resident anywhere) can be reconfigured in moments and act on data (also resident anywhere) to perform the business, engineering, production, and support functions. Each component in the modular system must be highly specialized to improve performance and must rely on shared services to reduce system complexity. Components must have the capacity to be easily and rapidly assimilated into the reconfigured information systems regardless of their location. The easiest and most rapid assimilation will occur if the software components can integrate themselves into manufacturing systems with the systems understanding the component interfaces and the components understanding the system behavior. A comprehensive set of information models or information object classes with self describing interfaces will become the norm. Emerging frameworks and research and development projects such as the National Industrial Information Infrastructure Protocol (NIIIP) project at IBM, the Simulation Assessment Validation Environment (SAVE) project at Lockheed Martin, the Systems Integration Architecture at the Agile Aerospace Manufacturing Research Center, the Systems Integration for Manufacturing Applications Project at the National Institute for Standards and Technology, and a variety of industry specific ventures are paving the way toward this change. NGM must move from the current state of a proliferation of proprietary formats and competing standards to a suite of standards for data exchange (including geometry, features, parametric data, text, hypertext, images, video, sound, communications), which enables modules to be rapidly connected together into responsive information systems. Object-oriented, and functional component software which is frequently re-used and autonomous or responsible agents will be much more prevalent than today. The World Wide Web will provide unparalleled and easy access to necessary data and information anywhere in the world including within a single organization. Processes for design, engineering, procurement, contract negotiations, etc. will be dramatically improved because of this easy access to data, information, and services.
2.0 RELATIONSHIP TO NGM ATTRIBUTES The major benefit of this imperative will be the ability to rapidly form new organizations without the barrier of an existing information system which cannot be changed in the same time frame. A metric for this would be the speed with which a new information system can be formed from existing modules. An example value would be to be able to create/establish an information system supporting an NGM enterprise 100 times faster than today (1 week vs. 2 years). Since the information flow throughout an enterprise is a critical factor in its smooth operation, this capability will facilitate the creation of the enterprise, as well as its operation. It is conceivable that, once methods are found for representing core competencies within the information system modules, these representations can be used to improve the match of the individual enterprise components into a new enterprise. An NGM responsive information system impacts all the NGM attributes to a greater or lesser degree as discussed below. Customer Responsiveness - An adaptive, responsive information system will facilitate the ability of design, engineering, and other enterprise teams to interact with the customer to obtain appropriate feedback and form virtual and extended enterprises. Every organizational entity will adopt roles as both customer and supplier. NGM systems must support real-time feedback and feed forward of customer and supplier information in the appropriate (expected) form. Particularly in the Integrated Product/Process Development (IPPD) domain, responsive information systems will play a key role in dramatically improving the responsiveness of an organization to market demand. Plant and Equipment Responsiveness - An adaptive, responsive information system will facilitate the integration of machines with information systems and hence enhance their responsiveness. Optimal equipment utilization and factory throughput will require reduction in human intervention. Plant equipment must act as self-aware peripheral devices to the factory system. Teaming - By allowing all team members easy access to integrated data, applications, and communications, teaming will be easier. Social trends will dictate that the office will exist where ever the individual contributor is located. Capital investment in manufacturing equipment will still mandate the existence of central manufacturing facilities. NGM Enterprise information systems must support team-based activities regardless of the spatial or temporal orientation of the individual contributors, and these systems must support the interaction of these teams (allowing for a team of one) with central facilities. Human Resource Responsiveness - People will be more responsive if the tools they need to perform their functions are integrated. Embracing diversity requires that systems, supporting processes that involve human agents, must not be culturally biased. Responsive information systems will also facilitate distance learning and other forms of network-based training and education which will in the long run make people more responsive. Global Responsiveness - By allowing heterogeneous systems, data, and communications to be integrated, global responsiveness will be facilitated. Internet and the World Wide Web are pointing the way to a globally integrated, responsive information system.
3.0 BARRIERS TO IMPLEMENTATION There are several barriers to a next-generation responsive information system which can be rapidly composed or adapt itself to a new environment. The first major barrier is the current approach to integration in which there is focus on both central, shared databases in a neutral format and monolithic systems. Monolithic systems are difficult, if not impossible, and hence expensive, to change. Concomitant to this barrier is vendors reluctance to support to truly open architectures and their general focus on point solutions. They are typically unwilling to open up their applications so that users can access single functions, and unwilling to standardize the attributes of the data inputs and outputs. A major reason why this is true is that neither the vendors nor the users understand the importance or the nature of the interface between modules. In any modular system, the interface definition is critical to the assembly of those modules into larger functional modules. These modules need to have clearly defined and standardized interface definitions that allow them to be rapidly integrated within a universal framework. Many vendors claim to have open architectures, but they are only open if one adheres to their proprietary standards which are usually difficult to obtain. An architecture, or framework, can really only be called open if it is freely available and the command interfaces (i.e., the application programming interfaces) and data interfaces (i.e., the standards) are widely published and easily accessible. The World Wide Web fits this picture. While there are currently good business reasons for the vendors attitude, we need to move to a different business paradigm: an environment in which modules provide business, engineering, and production services that can be accessed as units and combined in many ways to respond the so-called ubiquitous service environment1. Approaches that take upwards of 2 years to create a new business system, essentially scrapping the previous one, will not work in the responsive, dynamic world of NGM. Another major barrier to the imperative is the multiplicity of standards for specific domains and the length of time it takes to create a specific standard. While the availability of certain standards will enable the move to information infrastructures, there are many conflicting standards and many standards lacking. For example, there are multiple, overlapping standards in high-level communications, particularly for passing of messages among distributed objects on heterogeneous systems, and for data exchange (Table 3.0-1). There are also diverse standards for graphical user interfaces (the main man-machine interface) for documents, images, video, and sound, all of which will be increasingly important for next-generation manufacturers. This multiplicity of standards makes rapid access and use of data slow and difficult, particularly in the product geometry world. STEP has come a long way in addressing these problems in this domain but it is taking too long and has become so complex that users are adapting other standards (e.g., DXF) to allow them to progress. A further related barrier is the cost of comparative analysis of technologies and standards for interoperability. Standards must be locally tailorable and responsive. Table 3.0-1. Current and Emerging Multiple Standards that Form a Barrier to a Responsive NGM Information System
Topic
Communication Data exchange
Subtopic
Product Geometry Text, hypertext Images Simulation data Production plans
Example Available Or Emerging Standard CORBA, http, OLE/COM, DCE, ISO/OSI

STEP & its various APs STEP AP 210, etc., DXF, STL, HPGL http, SGML, RTF, JPEG, bitmap, GIF, TIFF, DIB, PCX, MSP SAVE MDF/CDF ALPS, STEP AP Windows, X-Windows, Open GL, Tcl/Tk IDEF, NIAM C, C++, ADA, Java, IDL WAV, AU, RA, MIDI, RMI, AIF MPEG, AVI, MOV SQL, SDAI
Presentation/GUI Process modeling Computer languages Sound Video Database Query Languages
There is no process to rapidly tailor standards, specifications, and protocols for adoption by industrial teams to enable rapid response. If there were agreed-on standards for every aspect of the command and data interfaces among modules, this would not be a barrier. Lacking these, it currently takes too long for a group of companies, perhaps forming a Virtual or Extended Enterprise, to agree on even the product data exchange standards let alone all the other standards that must be considered. In a related area, the disorganized competition between consortia developing basic technologies for systems interoperability is currently acting as a hindrance to a responsive information system. For example, the Distributed Computing Environment Group, the Object Management Group, and Microsoft are all working on protocols for message passing between distributed objects on heterogeneous systems. The HTTP Working Group is working on very similar standards. This area is a key enabler for responsive information systems of the future, yet there may be as many as four competing standards for it in the near future. Another barrier is a general lack of knowledge or understanding of design, engineering, production, and business processes. By this we do not mean that we do not know how to design, engineer, and produce artifacts. The overall processes are well understood2,3. The issue concerns the details of the processes. For instance, because design is a creative process, it is difficult to prescribe how an individual should solve a particular problem. Because of the large number of variables generally involved in the engineering of a concept, there is no one fixed process to end up with a well-evaluated and tested product. The actual path followed will depend on a large number of factors. The trend to outsourcing of design, engineering, and production, to more collaboration and teaming in these processes, and to involvement of more disciplines exacerbates this uncertainty. This emphasizes the need for an information system supporting these highly variable processes in an NGM environment to easily and dynamically cope with this rapidly changing, heterogeneous environment. Current systems are barriers to these new forms of work. Finally, there are cultural barriers to the implementation of an information infrastructure and modularization of services. These include a lack of appreciation of how to change culture, the difficulty in implementing change within an organization, and the not-invented-here syndrome. These are perhaps the most difficult types of barriers to overcome
4.0 ENABLERS TO OVERCOME BARRIERS The major enablers of adaptive, responsive NGM information system are as follows: A new basis model for integration, matched to a chosen organizational structure, in this dynamic heterogeneous world Data, information, and knowledge standards Networking, communications technology, World Wide Web protocols, standards, and technology Integration Frameworks (IFs), or Information Infrastructures, which include distributed objects, ubiquitous services, and responsible/autonomous agent technology. The relationships of these enablers to each other is illustrated in Figure 4.0-1.
Integrating Framework
Distributed Objects & Ubiquitous Service Environment Responsible Agent Technology
Roof
Electrical/HVAC
Standards for Data Exchange, Communications, Distributed Object Protocols Transformation Basis or Component Software Basis Model
Plumbing
Frame
Ubiquitous High-Speed Communications
Foundation
Figure 4.0-1. Relationship Among NGM Information System Enablers Ubiquitous, high-speed communications are the foundation on which responsive information systems rest. The basis model is the frame which supports the rest of the enablers. Standards, responsible agent technology, and the ubiquitous service environment are the various components that make the house useable as more than just shelter. The integrating framework provides the roof under which all other components work. This NGM imperative will only be realizable if a suitable model of underlying NGM principles, a basis model, is adopted by the architects of next-generation manufacturing systems. Finally, a major enabler for creation and use of Integration Frameworks is a realization that approaches to information systems need to change if U.S. manufacturers are to retain their world leadership. This is not discussed here, but is suggested by the overall approach.
4.1 Basis Model 4.1.1 Purpose The purpose of a new basis model is to facilitate communication about integration in the dynamic heterogeneous world of next-generation manufacturing and to provide a guiding principle(s) to developers of such systems4. Booch uses the term an architecture5 and Metalla the term an abstraction of the principles of the systems6 to describe this concept. Note that a basis model is not a Technical Architecture in the DoD definition7 which is a minimal set of rules which governs the arrangement, interaction, and interdependence of the parts or elements and whose purpose is to ensure that a conformant system satisfies a specified set of requirements. A Technical Architecture identifies system services, interfaces, standards, and their relationships. A basis model is a simple abstraction of the principles upon which the system is built. To be effective, a basis model must not only point the way to future systems but must also be able to describe existing systems and be very simple. 4.1.2 Traditional State of the Art/Best Practices The traditional basis model for integration is a shared database. This concept has served integration developers well for a number of years but it is not adequate for the NGM environment. First, it is a static model. There is no indication of the time dependence of the data. In the responsive, dynamic NGM environment, data is being frequently added incrementally and in large chunks. The old model is focused on the use of data not its creation. It is data centric and ignores the processes required to create a product. This flaw becomes important when we begin to consider the higher levels of integration8. The STEP Application Integration Model is an attempt to deal with this problem9 and recognizes that the data standards must be related to the processes which involve them. Most of the focus of the efforts to create a central shared database appear to be on the geometric aspects of the product. However, there are many other pieces of data which are necessary to create, for example an aircraft10. When applied to all the data required to describe a product at all stages in the PRP, it represents an enormous amount of data with no apparent structure. STEP attempts to overcome this problem through the Application Protocols, but there appears to be little relationship among many of the APs being developed. A further problem has been introduced by Fulton, who has recognized the need to introduce the concept of Unification to the idea of the common, neutral shared database to ensure that various views of the common data, once extracted from the central database, remain in synchronization with the rest11. This is a failure of the traditional basis model in the dynamic, heterogeneous domain of the NGM Enterprise. Another traditional, but much younger, basis model is that of object-oriented programming. In this model everything is an object which encapsulates data and functions specific to that data. The approach is to identify all the objects in the overall system, define the data associated with them and the methods required to act on that data, and develop messages which request action from other objects providing interactions among them. Some claim that such an approach is reconfigurable. However, the interactions among the objects rapidly becomes very complex and without an overall structure, it becomes almost impossible to add objects to or reconfigure objects in a complex system. A further problem is that a fundamental premise of this model is that data and function are kept together within the object. In a manufacturing enterprise, data is created throughout the product realization process (PRP) and is passed from one function to another as the process transforms the requirements into instructions for making the artifact. Another emerging basis model is that of autonomous or responsive agents. In this model which is an extension of object-oriented programming, the objects have embedded in them rules and methods governing their behavior individually and in cooperation with other objects. This basis model has the same problems as the object model unless the data and functions are kept separate as in the TAR model (see below). In which case it becomes this model with the functional transformation agents having more intelligence. This approach is discussed in the next section. 4.1.3 Current State of the Art/Best Practice A new basis model, which has emerged from the design theory and methodology domain, simply states that all information processes (i.e., applications, software) transform data from one type or form into another type or form. In the 1970s, research in the theory of VLSI design recognized that the design process is a series
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of transformations: from needs to requirements to conceptual design to detailed design to production plans and finally to the material transformation processes12. The mechanical and electromechanical design domain recognized in the 1980s that this model also applied to their domain 3,13,14. Finally, Mills proposed that this model is generic: that is, it applies to all information systems 15. As far as we are aware, this is the only basis model for advanced information systems being discussed in the literature. In this new basis model, we define a transformation module as an entity which transforms data sets. Data sets can be anything from a single byte of data to a set of rules encapsulating knowledge to the database of a full MRP system. Transformation modules have inputs and outputs which consist of two parts: an administrative command (Application Programming Interfaces, or APIs) and one or more data sets. Figure 4.1.3-1 illustrates the concept. Modules provide services consisting of engineering or business data transformations. Modules are linked through the input and output data sets and commands into processes including such subprocesses as decomposition, composition, recursion, iteration, etc. These processes are just more complex transformation modules. The model supports the concept of software re-use.
Interface Boundary Input Interface
Commands
User
Output Interface
Commands
Output Data Set/ Aspect

Modality Data Model Name Path File Format File Type Access Type
Functional Transformation Agent
Output Data Set/ Aspect

Modality Data Model Name Path File Format File Type Access Type
Wrapper
Figure 4.1.3-1. Transformation Basis Model Input and output data sets have attributes which provide information about the data set. These attributes are necessary when an output data set from one transforming module is matched to the input data set of another to create a process. Research has indicated that there are at least seven attributes which need to be considered for a data interface16: the type of data, the data model or the semantics of the data set, the structure of the physical storage (e.g., binary or ASCII flat file, database, proprietary), the format of the data in that physical storage structure (e.g., STEP, DXF, RTF, PDF, etc.), the method of access required (e.g., read/write/database query, RPC call, API, UNIX pipe, command call), the name of the physical storage structure and its path. Other attributes may be necessary in specific instances. For example, persistence, sharing mode, and security level may all be important under specific circumstances. We have termed this list of data interface attributes a modality since it describes the mode of the data, not its meaning 16. Integration within this basis model then is the act of defining transforming modules with matching data sets, and providing mechanisms to support: 1) their composition into higher level transforming modules or processes, and 2) their enactment, monitoring and control. If this is done in a permanent manner using a shared database then we have a traditional information systems solution. Hence, this basis model encompasses the traditional model. If we provide an infrastructure in which transforming modules with matching data sets and attribute lists can be configured and reconfigured rapidly, then NGM can be accommodated. Note that this definition is very close to that suggested by Seheni et al 17.
Viewed from another perspective, that of computer languages, this is basically a functional approach to programming. 4.1.4 Pilots/Emerging State-of-the-Art Extensions The only explicit pilot of this full model is the research-oriented Systems Integration Architecture which is being developed by the NSF Agile Aerospace Manufacturing Research Center, hosted within the Automation & Robotics Research Institute of the University of Texas at Arlington. This project is described below and in reference 16. Other pilot projects such as the National Industrial Information Infrastructure Protocols program 18, the DoD Common Operating Environment19 and its implementations such as the Global Command and Control System, and the SAVE program20 are using parts of this model implicitly. As the new basis model becomes better understood, it will be used explicitly more and more widely and for software development other than Enterprise information systems. 4.1.5 Future Stretch Goals In our vision of the future, modules will be able to be re-used by many with minimal modification for their own requirements since they will be small enough and there will be enough variety in functionality that users will be able to configure a system exactly meeting their needs in a very short time. Using intelligent search engines, a person forming a collaboration like a virtual enterprise will be able to identify the required modules and compose them into a new information system one hundred times faster than is possible today. In a more advanced approach, the modules will have self-describing interfaces and know how to interact with others so that humans do not have to do the configuration. They may include rules about their behavior and be able to collaborate with other modules (i.e., holons or responsible agents) to solve information systems transformation problems dynamically. Note that this extension is not the current responsible agent approach mentioned above, but is a modification to the functional programming approach in which data is separate from function and is acted upon by the function. These extension are also discussed in Section 4.3. 4.2 Standards 4.2.1 Purpose The purpose of standards is to facilitate the creation of complex systems out of transforming modules. Standards are required for all the attributes necessary for data set interfaces. Existing standards are essential enablers for the NGM responsive information system and are absolutely critical for integrating frameworks. Note that communication standards are treated separately in Section 4.4 because of their criticality. Without command and data interface standards in specific areas, the development of integrating frameworks will be severely hindered. Without standards in general, it will not be possible to form any kind of information system without a huge, time-consuming effort to translate various protocols. Data, information, and knowledge cannot flow anywhere if the connections cannot be made in a standard way, the machines cannot interpret messages from other machines, and applications cannot recognize or interpret the data. Standards are a pervasive necessity from the type of wire connector used to connect one computer to a Web or even another computer up to standards for exchanging knowledge. There are many standards in existence that are performing useful functions millions of times a second throughout the world. However, there are key areas where current standards are non-existing, or, even worse, conflicting with several standards covering the same topic. Table 4.2.1-1 lists domains where standards are essential and the current status of standards activities in those areas. Note that we have not included communications standards. These are so important that they are dealt with separately, see Section 4.3.
Table 4.2.1-1. Areas With Conflicting or No Standards

Domain Knowledge Information Text Design Rules Geometry Parametric Design Information Features Subdomain Status de facto in use none none two emerging none STEP slowly emerging DXF emerging fast none none Examples KQML None, difficult to define SQML, WORD format, RTF SQML, HTML
Formatted Tagged, Linked
ProEngineer format ProEngineer format
Standards will be required for product data (e.g., STEP) including task and production plans, process data and knowledge, simulation (e.g., the SAVE Projects MDF), distributed objects (e.g., CORBA, http, OLE), communications, text, images, video, sound, and modeling. While many standards for all of these exist, no one standard is as yet generally accepted for a particular topic. For instance, STEP, IGES, and DXF are all still used for the exchange of geometry. Indeed, many have become impatient with the slow rate of emergence of STEP and are promoting DXF as the industry standard for geometry exchange. This needs to change if the NGM responsive information system is to exist. A critical aspect in standards of all types is the concept, embodied within STEP and the SAVE Meta Data Format (MDF), of the data model: the meaning of the data or information to be exchanged or interfaced. Having a semantic model of the data set eliminates the possibility of two organizations using the same word to describe two different concepts or having two different words to describe the same concept. This needs to be applied to a broader range of standards which the STEP effort is attempting to do. 4.2.2 Traditional State of the Art/Best Practices and Current State of the Art In the design domain, the Initial Graphic Exchange Standard (IGES) is currently used to exchange geometric (i.e., computer aided design) data today. Most CAD systems can read in or output an IGES file. The limitations in IGES are that there are various interpretations of some of the entities defined within the standard which leads to misinterpretation and inaccurate translations. Moreover, it does not handle text very well. The text information in a CAD model is often as important as the graphical information. The various individual STEP Application Protocols (APs) the terminology for a standard for exchange in a particular set of design processes are emerging from the standards process and beginning to be accepted and used, but more in Europe than in the U.S. Many CAD vendors are providing the capability to input or output the STEP APs. However, because of its dominance in the PC market another emerging CAD exchange standard is the Autodesk DXF format. It seems to be more reliable that the STEP APs at this time but suffers from the same problem as IGES and does not cover as many subdomains as STEP. In the document domain including some graphics, the Standard Graphical Markup Language (SGML) is used extensively by DoD as part of its CALS initiative. However, word processors such as Microsoft Word do not read in or output SGML files. Special readers and translators are required. The Hypertext Markup Language (HTML) is a fast expanding subset/extension of SGML with its use growing as rapidly as the World Wide Web. Translations among these are not perfect. For images there are at least eight formats in general use while for movies and video there are five. For sound, at least five standards exist. There are a number of competing standards in graphical user interfaces. In the PC world, Windows is dominant. In the UNIX Workstation, X-Windows appears to be generally accepted except for applications demanding high-performance graphical displays where the Silicon Graphics Open GL windowing system is used. Each UNIX machine vendor (e.g., Sun, Digital, IBM) does have their own windowing system.
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The Technical Architecture for Information Management (TAFIM) of the Department of Information Systems Management (DISM) lists the currently acceptable standards in a wide variety of domains21. Technical Architectures Several organizations have created what has been called a Technical Architecture which is simply a listing of all the standards in the various domains of interest. The two most well known are TAFIM, 21 of the Department of Information Systems Management, and the Technical Architecture document of the Technologies Enabling Agile Manufacturing 22. This latter Technical Architecture is a derivative of the TAFIM, so only TAFIM is described here. The Technical Architecture Framework for Information Management (TAFIM) provides general guidance and documents the processes and framework for defining technical architectures. The TAFIM applies to many DoD mission/domain areas (e.g., C4I, sustaining base) and lists all adopted information technology standards that promote interoperability, portability, and scalability. A Technical Architecture (TA) 7 is a minimal set of rules governing the arrangement, interaction, and interdependence of the parts or elements whose purpose is to ensure that a conformant system satisfies a specified set of requirements. It identifies system services, interfaces, standards, and their relationships. It provides the framework, upon which engineering specifications can be derived, guiding the implementation of systems. The purpose of a DoD TA is to provide the foundation for a seamless flow of information and interoperability among all tactical, strategic, and sustaining base systems that produce, use, or exchange information electronically; to mandate standards and guidelines for system development and acquisition which will significantly reduce cost, development time, and fielding time for improved systems, while minimizing the impact on program performance wherever possible; to influence the direction of the information industry's standards-based product development by stating the DoDs direction and investment so that information industry's development can be more readily leveraged in systems within DoD; and to communicate DoDs intent to use open systems products and implementations to industry. DoD will buy commercial products and systems, which use open standards, to obtain the most value for limited procurement dollars. 4.2.3 Pilots/Emerging State-of-the-Art Extensions STEP continues to grow by the addition of new APs. The National Industrial Information Infrastructure Protocol program18 is working on a suite of protocols to facilitate integration, while the Simulation, Validation, and Assessment Environment 20 program is developing standards for the exchange and sharing of nongeometric information critical to virtual manufacturing. 4.2.4 Future Stretch Goals STEP will finally emerge as the standard for product exchange and sharing. It will include not only geometry but also parametric data, features, non-geometric data such as tolerances and surface finish, and process plans. Vendors will use STEP APs for their internal storage, thus facilitating data sharing, not just exchange. It will be expanded to include design rules, and process knowledge so that upstream evaluations of producibility even in a global marketplace will be more feasible. Mediation techniques such as those proposed by NIIIP will become more prevalent for those areas where standards are still not agreed on18. Standards for other components of the product realization process such as requirements will become more prevalent. Standards for a common look and feel, for formatted text, for multimedia information, will be created and adapted. Methods for developing standards in limited communications domains ten times faster that is possible will be developed and implemented. Standards will be created and adopted on-the-fly in real-time. 4.3 Communications and Networking Technology 4.3.1 Purpose Communications encompass everything from the physical connection all the way up to the protocols used to communicate between applications and objects on separate computers. It is like the water and electric utility, enabling people to use it easily by plugging in a device. The ISO/OSI seven-layer protocol architecture provides a good overview of the kinds of standards that are required 23. This seven-layer architecture allows for diverse standards within a layer as long as the information passed over the layer boundaries adheres to strict
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standards. Hence the nature and speed of the physical connection between two computers can change without affecting the other layers. This allows one to change from a modem and telephone lines at 9600 baud to a high-speed 100 megahertz using coaxial cable or shielded twisted pairs without the user knowing except through the performance limits imposed by the slowest link in the chain. TCP/IP is one suite of standards adhering to this architecture. The Token Ring protocol is another. Message passing protocols allow objects on separate computers to communicate through the seven layers and are a special part of the application layer of the ISO/OSI architecture. Speed and bandwidth are usually used interchangeably since frequency can be traded for bandwidth by multiplexing. Data rates are usually quoted in bits per second (baud) or sometimes bytes per second. A byte is usually 8 bits. Speed is usually quoted in megahertz (MHz) which is millions of cycles per second. 4.3.2 Traditional State of the Art/Best Practices The most widely spread personal communications link is probably the 2400 baud modem in general use although that is rapidly being replaced by 28.8 kbaud modems. These use normal telephone lines and modems with increased speed and new compression algorithms appear almost every month. In large corporations and between important customers and suppliers, leased T1 telephone lines provide much higher bandwidth (megabits/sec) for Wide Areas Nets but are much more costly than normal telephone lines. These are dedicated point-to-point links. T3 lines, also a point-to-point link provide even higher bandwidth at higher installation and monthly costs. At even higher costs are application specific microwave, satellite, or specialized ground links (e.g., fiber optic cable) which provide very high bandwidths. In the Internet physical communications domain, there are many different standards with different bandwidths and speeds for the physical connection (e.g., T1 and modem communication appear to be fairly standardized). For basic protocols for communications, TCP/IP appears to be a generally accepted standard for networked computers, while for access through modems, PPP, POP and SLIP, all subsets of TCP/IP, are all in use. For higher level communication protocols (e.g., object message passing) there are several competing protocols emerging. The Common Object Request Broker Architecture (CORBA)24 is one, but the Distributed Computing Environment (DCE) has better security. DCE tends to provide a lower level of protocol standardization than CORBA, however, so they are not really in competition, but announcements from the DCE domain indicate that they plan to provide CORBA-like functions in the near future25. Either can be expensive to implement and interoperability for ORBs from different vendors is not settled yet. In the meanwhile, the http protocols are rapidly finding uses beyond the original developers intent and are becoming low-cost competitors for many of the functions provided by these two protocols. 4.3.3 Current State of the Art/Best Practice The best state of the art is highly dependent on the specific use and cost. For many applications the 28.8 kbaud modem provides adequate bandwidth, but it is becoming limiting with the spread of the World Wide Web and its plethora of high-definition still images, video, and sound clips, all of which lead to large files which take a significant amount of time to download. For interactive video applications, even the best normal telephone lines and standard modems (28.8 kb) do not offer adequate bandwidth. Even T1 lines which form many of the backbone connections of Internet do not provide enough bandwidth to supply TV quality videos even with the best video compression techniques. Interactive video is possible but only at frame rates up to about 10 frames per second, significantly less than TVs 30-60 frames a second. ISDN lines offer an intermediate between normal phone lines and T1 links at intermediate costs. ISDN offer broadcast mode (like current telephones) in which you can connect to anyone with an ISDN connection unlike T1 links. ISDN offers a range of bandwidths up to and including T1 capability. ISDN modem costs are still relatively high for the consumer at this time, but are well within the reach of most businesses. ISDN suffers from the same bandwidth problems as the T1. The physical connections for Internet are a mix of high-speed, fiber-optic links for a highly redundant backbone covering the U.S. and most of the world and T1 lines providing connectivity to this backbone from universities, Internet service providers, corporations, government entities, and other large organizations. Mo12
dems provide the links for the individual to these main connectivity points. Performance of the Internet can vary tremendously. Some World Wide Web sites have become so busy that data transmission rates have fallen to the bytes per second range. Certain sections of Internet, being based on T1 lines, are also becoming overloaded and decreasing individual data transmission rates. The first is easily solved by installing larger and faster computers as servers and there is a strong economic driver for companies to do that. The restrictions imposed by the limiting sectors is more difficult and does not have as good an economic driver since they are often maintained by States or universities who often do not have the resources to upgrade, nor a financial impetus to do so. In addition to allowing users to access data and information easier than heretofore, the World Wide Web is beginning to allow users to access applications running on remote computers. The so-called Applet is one flavor in which small applications providing limited functions can be downloaded and run an a local machine. Of greater importance to the business domain is the ability to run large sophisticated applications on specialized machines remote from the user but with the results being displayed graphically on their local machine. Several approaches can already provide such capability. This opens up the concept of Information Brokers who can provide access to such applications or broker the connection between a service provider, who owns the applications and a user for a fee. Thus, users who normally could not afford either the specialized machines (e.g., high-end Silicon Graphics workstations) or the software (advanced virtual manufacturing software) will have access to such technology only paying for the time they use. While this may sound like a return to the old mainframe with dumb terminals paradigm, the only parallel is the pay-by-the-drink philosophy. The users are no longer tied to a specific main frame. They can take their business to the cheapest supplier of such services and mix and match applications freely. As an example of the emerging remote computing and providing access to advanced technology on a pay-bythe-drink basis, the University of Illinois, Urbana Champaigns (UIUC) Machine Tool Agile Manufacturing Research Institute has implemented what they call Software Tools: analysis software for various machining processes which can be accessed over the Web by individual users26. Some of the tools are resident at other universities and the data is transmitted over Internet to that computer for that analysis, the result being used by UIUCs software tool. The result is then passed back through Internet to the users for display on their machine. This approach makes use of the capabilities of http and CGI to launch the remote applications and provide them with data. While no charge is made for this service, it demonstrates that it is possible. 4.3.4 Pilots/Emerging State-of-the-Art Extensions For personal users to connect to Internet or company wide area networks, the ISDN modem is rapidly becoming cost competitive with conventional modems. They have already dropped in cost almost a factor of ten in the last two years. These can increase the connection speed significantly at relatively low cost. Frame Relay is a relatively new communications scheme which offers T1 capability in a burst mode at lower cost but it is not universally available. This is good for large data file transmission since the user pays by the drink. It is not suitable for interactive video at TV rates and is a point-to-point solution in contrast to ISDN. Asynchronous transfer mode (ATM) is emerging as a high-speed communications link at reasonable cost, but it is not widely available. It is not clear how the new digital telephone services will affect the data communications picture. The cable companies are pushing hard with the development of cable modems to allow building linked to the cable networks to communicate with the World Wide Web. Most of the modems currently available are asynchronous. That is, the downloading speed is much faster than the upload speed. Cable connections are not yet available nationwide. Many localities and school districts are installing high-speed communications links to provide the capability for local government, schools, and libraries all to link up to Internet and communicate freely among themselves. These are being used more and more for distance learning in which students can receive and interact with remote teachers. Limitations in the object message passing domain reside in the lack of standards for passing messages among the applets or just among objects. CORBA, the Common Object Request Broker Architecture, was supposed to take care of much of that, but has taken so long to emerge from the standards organization (the Object
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Management Group, OMG) that other standards are being used. One is the Hyper Text Transmission Protocol and its associated CGI extensions. These now allow users to send standard messages across the networks and have remote applications perform tasks. A big advantage of http is that the client and server software necessary to send and receive the messages is free, in contrast to implementations of CORBA. In addition to these two, Microsofts Object Linking and Embedding (OLE) approach to linking applications is becoming distributed (distributed OLE) and since it uses a different object model, initially none of the three approaches could work with any of the others. The current state of the art, however is that all three organizations (OMG, the http working group, and Microsoft) appear to be working together and the hope is that eventually a standard encompassing all three approaches will emerge. 4.3.5 Future Stretch Goals The telecommunications industry is one of rapid change with new approaches and technologies appearing almost weekly. Companies are merging and reemerging as they attempt to keep up with and surpass the competition. Telephone companies, telecommunication companies, cable companies, and radio and television companies are collaborating on an unheard of scale. It is not at all clear how it will all shape up. About the only sure bet in this domain is that it will be radically different than it is today. Bandwidths will be much higher and the average person will be able to communicate and access data and information in a way that is impossible today. Forecasting the future in this domain at this time is just not possible. However, we can be relatively sure that the capability of the World Wide Web will continue to grow, proliferate, and expand. It is conceivable that 10 years from now there will be no other way of interacting with other computers or people but the Web. By this is meant that telephones, data highways etc. will all be the same with voice carried on the high-speed data highways which will have such high bandwidth that voice will be available free. The method of charging for communication may change, however, to be more like what the telephone service is today: a monthly connect fee and pay by the drink for access to specific number, the fee being determined by the separation distance. This is already happening with the long distance telephone carriers offering Internet access for a monthly fee. The NGM Enterprise will make use of high-speed, high-bandwidth communications networks to pass information and knowledge along the supply chain in both directions. Bandwidths up to 1 gigabyte/second will be commonly available and at a low cost. Their cost and availability will be comparable with current telephone connections. The World Wide Web protocol and user interface standards will dramatically change the way businesses access data information and function both within the boundaries of their company and across the world. Both of these will be critical to the operation of an integrating framework. Without high-speed, secure networks, we will not be able to access data and applications when and where needed and the business will be severely restricted in its responsiveness. The World Wide Web protocols are not as critical because there are other, albeit less convenient, ways of achieving the same results. In the message passing protocol arena, it is not clear what will happen in this domain in the future, although there is some interaction among the various bodies. CORBA, OLE, and DCE will merge with http and Java having a strong influence on all. Java and http will have a strong influence on the whole communication domain, but it is not yet clear what it will be. There is too much hype over Java, the World Wide Web, and associated activities to know what will really emerge.
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4.4 Integration Frameworks 4.4.1 Purpose An Integrating Framework (IF), or infrastructure, is a suite of software modules providing the following services: Connectivity and communication at all levels from a physical link up to object message passing Data, information, object, and knowledge management Access, creation, editing, composition, enactment, monitoring, and control of all entities in the system (which can include all of Internet), including modules which transform data and the interfaces of these modules regardless of their location. An IF will allow different classes of users to integrate functions, applications, and data in a dynamic heterogeneous environment. It meets the definition of integration provided above. It depends heavily on the use of standards at all levels. A key facet of an IF is that it operates in a dynamic, heterogeneous environment. An IF is not the same as the technical architecture defined by DoD 7. An IF provides the hardware and software to support the integration of heterogeneous functions, data, and communications in a dynamic manner. A technical architecture is a minimal set of rules which governs the arrangement, interaction, and interdependence of the parts or elements and whose purpose is to ensure that a conformant system satisfies a specified set of requirements. It can also be a list of standards which should be used for a particular domain (e.g., the TEAM Technical Architecture 22 and DoDs Joint Technical Architecture7). An IF is also often called an information infrastructure. While there may be differences between the two we use them interchangeably here. 4.4.2 Traditional State of the Art/Best Practices The most common traditional though is that all one has to do is put all the data or information into a single, logically unified database and everything will be integrated. This is true, but, as discussed above, such an approach only allows others to tie in under very restrictive conditions which are usually difficult to meet. Another common thought is that some particular standard, such as CORBA, OLE, STEP, will answer all our integration prayers. CORBA, OLE, STEP, etc. are really enablers as discussed above and by themselves do not provide integration. Indeed, they can just as easily be used to create a monolithic, permanent system. Another common misconception is the so-called open systems. Often these claim to be able to solve all integration problems. Unfortunately, to our knowledge, there are no truly open systems available. Many vendors claim that their application, software, system etc. is open and can participate in a plug and play environment. Unfortunately, one vendors open system does not adhere to the same standards as another and cannot accept another vendors application. A truly open system provides a framework in which modules can be interconnected and the interfaces to the framework and the interfaces between modules are freely and openly published and used. Another traditional thought is that applications automate business processes and these provide integration. Applications, however, are typically ad-hoc concatenations of various software modules which work well together but rarely work with other applications. This is particularly true in the design and engineering domain. The only integration such applications provide is within the applications. It is not possible today to extract the best function from one application and combine it with another different best from a second application. There is an emerging trend, however, in which vendors are providing application programming interfaces which allow access to specific functionality within the application. This is a necessary development to facilitate integration in the dynamic, heterogeneous environment of the NGM enterprise, but it is not sufficient. Other traditional approaches are that one must purchase applications before one can use them. With the advent of Internet, even before the World Wide Web protocols made it easier, the ability to launch applications or functional modules remotely, even half way around the world, was making the outright purchase of an application unnecessary. Remote applets or even larger applications are becoming available to users remotely, as long as one has the appropriate communications bandwidth.
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The concept of Integration Frameworks is not new and has, in fact been around since at least 1980. As early as 1983, the European Computer Manufacturers Association (ECMA) started looking at what services a framework would need (the ECMA Software Engineering Frameworks Model)27. Much of the earlier focus was limited in application domain and was in the general area of software engineering and VLSI design and production. They were also not concerned with dynamic integration in a heterogeneous environment. 4.4.2.1 NIST/ECMA Reference Model The purpose of ECMA is: To develop, in co-operation with the appropriate national, European, and international organizations as a scientific endeavor and in the general interest, standards and technical reports to facilitate and standardize the use of information processing and telecommunication systems To encourage the correct use of standards by influencing the environment in which they are applied To promulgate various standards applicable in the functional design and use of information processing and telecommunication systems. The goal of the ECMA is to standardize information and communication systems. Under one of its technical committees, (TC33), the Portable Common Tool Environment (PCTE) is underway. The scope of this project is: To standardize a Public Tool Interface usable in a wide range of operating environments. To ensure a suitable foundation for portable, integrated tools and tool sets for systems engineering. To standardize the specification of data interchange facilities required to interchange data between PCTE repositories or between PCTE and non-PCTE repositories. To standardize schemas allowing data to be shared between tools in a given PCTE repository. The current program of work includes working with ISO/IEC JTC1 to attain global approval for and to maintain actively the ECMA PCTE standards, defining the abstract specification and bindings of new services in the domain of object orientation, and high-performance access to fine grain objects. To develop new bindings and standardize them through ECMA and other standardization bodies as appropriate. To produce the standard specification of a facility allowing two different repositories (of which at least one complies with PCTE) to exchange their data. To facilitate the sharing of data between tools by producing the standard specification of PCTE schemas covering systems engineering domains, in liaison with the appropriate standardization bodies. To maintain Technical Report ECMA TR/55, specifying a reference model for CASE frameworks, in liaison with NIST. To maintain Technical Report ECMA TR/66, Mapping of PCTE to the ECMA/NIST Frameworks Reference Model. To maintain Technical Report ECMA TR/69, specifying the Reference Model for Project Support Environment, in liaison with NIST. To maintain liaisons with appropriate TCs of ECMA and with other standardization bodies and industry consortia with the goal of enhancing PCTE. The NIST/ECMA Common Model is not an IF itself, rather it provides a model for one. It classifies the services that a framework must provide into: user interface, process management, policy enforcement, framework administration, object management, and communications. These are described in more detail in Reference28. The NIST/ECMA model provides for three forms of integration: data, control, and presentation. For data integration, they cite the IEEE draft standard P1175 for tool integration as having four information sharing
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methods: direct transfer of information between two tools, file based, communication based, and repository based. The repository based approach (which implicitly uses the common, shared database basis model) provides several services which help to tightly integrate tools and the repository. These include storage and management of objects, entities, and their relationships and linkages, version and configuration control, naming services, security services, and transaction control. They also provide a metamodel service, a query service, a view service, and data interchange services. For control integration, they note that tools must be able to activate other programs and notify each other of events and share functions. Mechanisms of control include message passing, triggers, and others. Control can also be invoked by means of global process management, project management, tool invocation, electronic mail, configuration management, and context management. Presentation integration involves user interface services which need to be in a consistent manner to make new tools easier to learn. Window-based tools have four levels of presentation integration: the windowing system, the window manager, the user interface development tool kit, and the look and feel guidelines. The NIST/ECMA reference model also recognizes two layers of integration: vertical and horizontal. Horizontal integration refers to the ability to maintain the integrity of design information within each life cycle phase across many modeling methods. Vertical integration ensures the completeness and consistency of information generated in various stages of the product realization process. The distinction between what they call vertical and horizontal is important for true integration of product data, but does not recognize the importance of another dimension of product data, namely the product structure which is orthogonal to both these dimensions. The Portable Common Tool Environment (PCTE) is one name for implementations of the ECMA common model (ECMA CM). Several versions of the ECMA CM have been discussed by Chen and Norman 29, Jarke30 and Wasserman 31. One commercial version of it is the Atherton Tool Environment (ATE) which Wasserman31 has described. Following along the lines of the NIST/ECMA model, Wasserman, for instance, identifies five types of integration: platform, presentation, data, control, and process31. Although his concepts are also oriented to software engineering they appear to be quite general. Platform refers to the need for the interoperability of tools across different platforms and operations systems. Presentation refers to the ability to share the same look and feel from the users perspective. Data integration requires not only the sharing of the data from a central repository or database, but also managing the relationships between data sets. Control integration highlights the need for tools to be able to notify one another of events. Finally, process integration occurs when the tools are integrated in a manner which supports a well-defined software engineering process. Wasserman also refers to the concept of integration of vertical as well as horizontal tools in regard to data integration. Vertical tools include dataflow diagram editors, and compilers. Horizontal tools are software packages which provide configuration management, requirements traceability, and the project management. Wassermans concept of the vertical and horizontal does not seem quite as clear as that in the NIST ECMA Model. He also recognizes the need for levels of integration across the types of integration mentioned above, particularly for data, presentation, and control integration. Levels for data integration range from explicit message passing to the use of a database. Presentation levels range from the window system itself to adherence to a set of interface development guidelines. Control levels range from direct notification to a message server. Wasserman's ideas, in which the NIST/ECMA common model are implemented in a commercial product, is important since it recognizes the need for control and process integration. This is a useful model in that it introduces the concepts of levels within types, but in our view, their integration types are not interdependent which presents several problems. Interoperability across platforms, for instance, is helpful but does not provide integration, if, as implied in this work, the computers are not connected. If the computers are connected, platform integration also appears to ignore the different types of connectivity that might exist between platforms. It also appears to ignore levels within platform integration and process integration. Jarke has expanded on the concept of the common database in software engineering, called a repository, in the work of the ESPRIT program he managed 30. This program investigated the lack of ..formal integration across development stages between the system and its environment or across development tasks" 30. He found that they could integrate the development stages and tasks by means of process-oriented conceptual models. These models were made operational by means of database techniques and knowledge representation. They
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recognized three important dimensions of integration: dependencies among development stages, evolving relationships among systems and their environment, and the integration of development tasks from individual actions to the collaboration among teams. Their repository, ConceptBase, uses meta-modeling at the specification stage and database trigger concepts at the implementation stage. This work clearly recognizes some of the problems in dealing with integration of processes as well as data and the need for data integration from several viewpoints as discussed above in Wasserman's work. A related area in which integration is important, particularly in Europe, is the Portable Common Tool Environment (PCTE) also often called the Integrated Product Support Environment (IPSE). Brown and McDermid have defined the requirements for a PCTE/IPSE to be 32: Generality - Should support a range of applications and development styles and hence a range of tools Flexibility - Must accommodate a range of needs Homogeneity - Users must be able to access a wide diversity of facilities consistently through a uniform user interface Portability - Must be independent of a single hardware configuration Compatibility - Need a well understood migration path from existing practice to full use of the technology. To satisfy these requirements, an PCTE/IPSE must provide synergy among tools to improve productivity, visibility of the development process to achieve control, unambiguous communication between tools to achieve quality, and consistency of interfaces to promote efficiency and to provide compatibility. The key aspects of integration according to these authors are: interface integration (e.g., Macintosh and Windows); process integration in which tools work together with a common understanding of the product development process; tool integration in which tools share data via a common data format, defined for a particular purpose (e.g., STEP/PDES); management integration which fosters group work by ensuring effective communication and information dissemination and also ensures no corruption by team members; and team integration in which the environment helps the managers control actual development. They also recognized six levels of tool integration: Carrier, Lexical, Syntactical, Semantic, and Method. This work on the NIST/ECMA common model appears to have laid the foundation for much of the subsequent work in integration frameworks, since a lot of these ideas appear in other projects, but it is still based on the traditional basis model of the common shared database (repository). 4.4.2.2 CAD Frameworks Initiative Established in 1988, the CAD Frameworks Initiative (CFI) is an international not-for-profit consortium whose mission is to facilitate and promote the adoption of open Electronic Data Access (EDA) technologies which improve designer productivity 33. CFI includes over 40 companies comprised of CAD end-users and design tool, workstation, and semiconductor suppliers in North America, Europe, and Asia. CFIs reference architecture is a listing of standards for exchange and sharing of data within the electronics industry sector. To fully exploit the designer's imagination and creativity, EDA suppliers must continually strive to offer support, higher levels of design abstraction, innovative algorithms, and tighter integration while defining an evolutionary migration path. This scenario creates intense competition among EDA suppliers and higher risks for a cooperative solution. By working with designers and suppliers of high-performance semi-custom silicon, CFI is uniquely positioned to satisfy requirements by concentrating our input to the EDA suppliers, thus reducing their risks to adopt and implement pre-competitive solutions. CFI, the Electronic Data Access Consortium, and SEMATECH have developed an industry-wide roadmap for development of standards within EDA. This roadmap represents the consensus of electronics and EDA technical professionals representing silicon suppliers, EDA tool developers, chip and systems designers, and standards group participants from around the world.
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The roadmap is the first industry-wide effort to assimilate all of the key EDA standards requirements in support of the semiconductor industry over the next decade and represents a major accomplishment for the industry. It has been published, and plans call for annual updates under the direction of the Industry Council who will oversee changes and implementation. ASIC suppliers take advantage of the standards roadmap to reduce the effort required to support EDA tools. For this strategy to be effective, EDA tools must be compliant to the standards and CFI conceived of the ASIC Lab to verify EDA tool compliance against established standards. Initially, the lab has been focusing on Verilog library modeling, including Standard Delay File format (SDF) and Programming Language Interface (PLI) support. ASIC test suites are being used to identify compliance issues for Verilog simulators against the standard. The ASIC Lab of CFI is offering neutral, third party testing, antitrust protection, software licensing, and contractor management. Inter-tool communication allows disjoint applications from different companies to interact and cooperate. To attain "open solutions" (systems where end users are free to add, replace, and delete tools), it is important that tools communicate their activities/requests in a publicly visible and anonymous fashion. Public visibility allows other tools to join freely in the communication process. Anonymity requires that the generator of a message not make assumptions about who will service it. Ideally, each message should be a stand-alone and stateless operation. For many applications, such stand-alone operations are fairly simple due to the nature of the objects involved. In the EDA domain, the problem is complicated by the existence of disjoint design data management models and the desire to perform public operations on small sub-components of those models. To achieve integration of such operations, applications need to support a common set of messages. The CFI Message Dictionary, in conjunction with other evolving messaging standards, will define the messages that CFI-compliant applications will be expected to support. Although labeled as a framework, their interpretation is as a framework of standards for data exchange. This is a critical aspect of adaptive, responsive information systems, but other services must be provided by a physical framework. Both of these initiatives have provided valuable ideas leading up to the concept of IFs. 4.4.2.3 Others Workflow managers are another form of framework, which allow users to combine applications into processes, in effect integrating them in a limited sense. Work flow managers typically, however, are proprietary systems, use the central database concept to manage the data used by the applications, and reside on a single machine. They are quite restrictive and the difficulty in penetrating the market is a reflection of these limitations. Product data managers initially started out with the central database concept but now allow users to have pointers to data outside of their database, essentially forming a logically unified but distributed database system with functionality assisting users to control product structure and configuration. They have also added on the capability to launch applications associated with a specific data file in a similar way that Microsoft Windows allows users to access files by double clicking on them in the File Manager. This functionality, however, was typically only available to limited users. To address this problem, the Concurrent Engineering Data Structures Project of the Rapid Response Manufacturing project used CORBA to allow any user to access product functions, such as sum costs of all components, sum weight, make subassembly, remotely from any computer with a CORBA-based client. 4.4.3 Current State of the Art/Best Practices There are a number of initiatives and projects in the domain of integration frameworks, some of which are restricted to specific applications domains (.e.g., Manufacturing Execution Systems). As far as we have been able to ascertain, there are no currently available integration frameworks in operation today, but some are very close. The one exception is the SEMATECH CIM Application Framework Specification which, we believe, is being used in several microelectronics fabrication plants or is planned to be used in several being built 34. A second, which is in the start up phase as far as we can tell, is the DoD Common Operating Environment19. Both of these frameworks have some limitations for the NGM Enterprise as is discussed below.
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4.4.3.1 SEMATECH The SEMATECH CIM Application Framework Specification seeks to unify a wide range of manufacturing execution systems (MES) software by categorizing common features found among them in an object-oriented manner 34. The specification, however, does not explain how to interpret this common object model to create pluggable applications. SEMATECH has previously advanced an object-oriented analysis of the semiconductor manufacturing domain. The SEMATECH CIM Application Framework Specification provides a follow-on reusable design step consistent with the preceding analysis effort. The CIM Framework defines a relatively small part of the manufacturing application code. The portion that it does define however, is critical. The SEMATECH CIM Application Framework Advances a common object model and an interfacing standard. From a design and code reuse perspective, use of the common object model will avoid reinventing the wheel. It will enable programming effort to concentrate on those value-add aspects of software which are truly unique to the application at hand. While the specification was developed with semiconductor CIM in mind, the bulk SEMATECH CIM Framework Specification describes the high-level object abstractions common to any manufacturing industry. By using the SEMATECH CIM Framework Specification as an Interfacing Standard, whose goal is to define a complete standardized set of messages that pass between applications, integration and interoperability among the heterogeneous set of applications at the MES level can be greatly simplified. All SEMATECH member companies have existing CIM systems reflecting some underlying architecture (which is seldom neat). While it is hard to justify strategic infrastructure organization improvement in todays predominantly tactical environment, SEMATECH believes that over the long term, reducing software complexity via use of a common object model standard will provide significant payback which will be spread across many projects in reduced integration and debugging effort. The SEMATECH CIM Framework describes manufacturing software on the MES level. MES is that category of software which is between direct equipment control and corporate planning, as shown in Figure 4.4.3.1-1. Figure 4.4.3.1-2 denotes the CIM Framework as facilitating pluggable applications. The framework binding, as it was originally conceived, is shown in Figure 4.4.3.1-2 as: Operating System, Communications, Database, User Interface and Language.
Figure 4.4.3.1-1. Context of the SEMATECH CIM Framework
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Figure 4.4.3.1-2. SEMATECH CIM Framework The CIM Framework defines interfaces to the functional layers above and below it. It also goes a little deeper than the traditional MES system [3,4,5] and overlaps with the lower tool level in terms of: Wafer-level tracking Material handling modeling Machine resource modeling. The SEMATECH CIM Framework does not: Describe which object instances fall into which applications; although it does describe groupings of object instances into components, all of which must stay together in the same application. Describe how the applications are distributed among computing spaces. Because of this, there are many ways of distributing interfaces and implementations among physical computers in a CIM Framework system. As a result, the ability for software to become pluggable is affected by the architecture in which it resides. Because CORBA systems technology has a large impact on eliminating the operating system, remote object communications, and programming language binding constraints between pluggable applications, future releases of the CIM Framework specification will be skewed toward CORBA technology, particularly in the system service areas of remote object communications and event management. A single supplier provides the framework binding. In viewing the CIM Framework as a multi-supplier open system of pluggable applications however (i.e., without a bunch of custom gateway bridges between single supplier backplanes), explicit description of the binding assumptions are a prerequisite for categorizing groups of applications which can interoperate. A major part of Reference 34 is dedicated to outlining binding considerations between interoperable applications. These include event management, business rules, state, and rules for pluggable applications. The following introduces the concept that binding issues are those considerations which fall below and above the scope of the CIM Framework in an interoperability layering scheme, and those architectures which can result from the CIM Frameworks pluggable rules for (and constraints on) pluggable applications.
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Interoperability among applications does not automatically result from using CIM Framework objects. For two or more applications to be pluggable, they must share the same binding. A major part of this document is devoted to explaining what SEMATECH has learned about the binding, from low level nuts and bolts issues of communication, to placement of CIM Framework object instances across physical machines in a distributed architecture. Even with the same binding, applications do not automatically become pluggable via use of the CIM Framework. SEMATECH CIM Application Framework Specification also states rules for using the services in the specification to create pluggable applications. The definition of the binding, and rules explaining how to use the specification, enable the open pluggable architecture pictured on the CIM Framework logo (see Figure 4.4.3.1-2). While it is hard to justify strategic infrastructure organization improvement in todays predominantly tactical environment, SEMATECH believes that over the long term, reducing software complexity via use of a common object model standard will provide significant payback which will be spread across many projects in reduced integration and debugging effort 34. The CIM Application Framework Specification has been implemented in several semiconductor fabrication plants. It appears to require modules meeting very specific applications and does not allow incorporation of legacy applications. It is also not clear how general it is outside of the Manufacturing Execution Systems domain and how it can accommodate dynamic integration in a heterogeneous environment. 4.4.3.2 Defense Information Infrastructure Common Operating Environment There are three views of the Common Operating Environment (COE) 19: As a system foundation As an architecture As an implementation strategy. The objectives of COE are: Develop a common core of software that will be a foundation for joint systems, develop a common core of software that is highly reusable, reduce development costs through adherence to industry standards, establish a large base of trained software/system engineers, reduce operator training costs and improve operator productivity, increase interoperability through common software and consistent system operation, improve system scaleability so that the COE-based system will operate with the minimum hardware resources, increase portability, improve systems security, and reduce testing. It adheres to the suite of standards embodied in the Technical Architecture For Information Management of the DoD described above 21 and encompasses: An architecture and approach for building interoperable systems, an infrastructure for supporting mission area applications, a rigorous definition of the runtime execution environment, a rigorous set of requirements for achieving COE compliance, an automated toolset for enforcing COE principles and measuring COE compliance, a collection of reusable software components, an approach and methodology for software reuse, a set of APIs for accessing COE components, and an electronic process for submitting/retrieving software components to/from the COE software repository. The COE assumes that it will migrate to full compliance with the TAFIM standards profile, it will be hardware independent and operate on a range of open systems platforms running under standards-based operating systems, and that COTS and GOTS will be the preferred implementation approach. Figure 4.4.3.2-1 presents their overall architecture.
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Mission Application Areas Command & Control Intelligence Logistics Transportation Personnel Finance
Standard Application Program Interfaces C O E C O M P O N E N T S E G M E N T S
Support Applications
Office Automation
Multi-Media (Briefing Supt)
Comm (AMHS, E-mail, Conferencing)
Alerts Generation & Handling
Database Utilities (Data Access)
Logistics Analysis
Standard Application Program Interfaces

Platform Services Standards I&RTS Style Guide POSIX TAFIM User I/F Svcs (X, Motif, NT, etc.) Track Management Services Comms Services MCG&I
C O E
Data Xchange Services (ODA/ODIF)
Workflow Management Services
Global Data Management Services
Exec Mgr Services (CDE)
Security Admin Services
System Admin Services
Graphics Services (GKS, PHIGS)
Data Mgmt Services (SQL, IRDS)
Operating System (Unix, NT, etc.) & Windowing (X, Motif, NT, etc.) Services
External Environment Interfaces (+ Middleware)
Kernel COE
Databases
Comm Links
ISDN AUTODIN SIPRNET
Figure 4.4.3.2-1. Common Operating Environment Overview Systems administration, shown as the shaded boxes, contains the software to load other segments. Security administration enforces security policies. The executive manager is the interface through which an operator issues commands. It is a menu/icon type system, not a command line. The COE system is installed via a bootstrap procedure and is focused on having all the software loaded into the workstation memory only for as long as it is needed. Functionality is added to or removed from the target system in segments. Segments are defined in terms of functions, not in terms of internal software structure. All software except the operating system and basic windowing software comes in segments. Segments may contain one or more computer software configuration items. Segments which are part of the COE itself are called component segments. Segments are not allowed to directly modify any resource owned by another segment. Functions are precisely defined. A function is: Part of the minimum software required to establish an operating environment context Required to establish basic data flow through the system Required to ensure interoperability Of such general utility that if rewritten, it constitutes appreciable duplicative effort.
Segments are categorized into the COE taxonomy: Infrastructure Services provide the architectural framework for managing and distributing the flow of data throughout the system. Management Includes network, system, and security administration
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Communication Distribution & Object Management Data Management Presentation Workflow & Global Data Management
Provides facilities for receiving data external to the system and sending data out of it Provides the infrastructure necessary to achieve true distributed processing in a client server environment Includes relational database management and file management in a distributed environment Responsible for direct interactions with humans Oriented toward managing logistic data.
Common Support Applications are more specific to a problem domain such as: alerts, correlation, mapping, charting, geodesy and imaging, message processing, office automation, and logistics analysis. This taxonomy is being extended to include logistic support services and financial systems. Plug-and-play interoperability is provided as long as the rules and the APIs below are adhered to. Compliance to the COE is obtained when the following principles are adhered to. They are to ensure COE compliance. All segments shall comply with the style guide All segments and data shall be structured in segment format All segments shall be registered and submitted to the on-line library All segments shall be validated with the tools provided All segments shall be loaded and tested in the COE prior to admission All segments shall fully specify dependencies and required resources All segments shall be designed to be removable and tested to confirm that they can be successfully removed All segments shall access COE components only through the published APIs Segments shall not duplicate functionality contained within the COE No segment shall modify the environment or any files it does not own except through environment extension files or through the use of installation tools provided by the COE. Degrees of compliance are indicated from peaceful coexistence to fully integrated. There are four categories of compliance: runtime environment, style guide, architectural compatibility, and software quality. They are intended to quantitatively answer the following questions: Can the proposed software be added to the system? Is the proposed software user friendly? Is the proposed software architecturally sound? What is the program risk?
There are eight levels of compliance: standards, network, workstation, bootstrap, minimal COE, intermediate COE, interoperable, and full COE. The DII COE uses POSIX compliant operating standards, X-Windows, and Motif. The COE is probably the most advanced open architecture at the present time and is being implemented in the Global Command and Control System and the Global Combat Support System19. It adheres implicitly but not fully to the basis model described above. While the most open of all frameworks, it does have some limitations which will become important in the future. All software required by a user must be loaded onto the workstation in front of the user. Thus, it eliminates many of the emerging capabilities of the World Wide Web. Another problem with it is that all these modules must be able to run on all the machines and operating systems any user might have. While the emergence of the POSIX operating system and common languages will mitigate this problem, there is still the difficulty of maintaining all the versions of a module. Fi24
nally, this constraint eliminates any possibility of using software optimized to a particular machine architecture on that machine (e.g., a supercomputer or a parallel computer) remotely. 4.4.4 Pilots/Emerging State-of-the-Art Extensions 4.4.4.1 National Industrial Information Infrastructure Protocol The National Industrial Information Infrastructure Protocol (NIIIP) vision is to make U.S. industrial companies more globally competitive and efficient through a new form of collaborative computing that will support the formation of virtual enterprises18. The NIIIP will enable innovative suppliers throughout America's industrial base to take advantage of recent advances in object information technology (CORBA); product data definition (STEP); and communications networks (Internet) to assemble virtual enterprises. The NIIIP will allow individuals, enterprises, and organizations, or their subdivisions, to assemble themselves into virtual enterprises to provide products, services, or solutions without being constrained by the use of different data, processes, information technologies, or computing environments. NIIIP project goals and objectives are: Establish an open, standards-based software infrastructure protocol which will integrate heterogeneous and distributed computing environments across U.S. manufacturing companies Document and distribute the NIIIP reference architecture and validation suites via public access to enable interested parties to implement and validate NIIIP Implement NIIIP by selecting, enhancing, integrating, and promoting those elements that facilitate virtual manufacturing enterprises Demonstrate the feasibility and practicality of NIIIP through pilot projects in commercial and defense enterprises Make NIIIP deliverables commercially available by providing all of the components and tools necessary to build a Virtual Enterprise Enable incorporation of legacy manufacturing information to preserve existing investments. Encourage widespread adoption of NIIIP technology by software vendors, systems integrators, and end users. The NIIIP architecture is still under development but some components (NIIIP Lite) have been released. The intent of the developers, however, is to make the architecture into a product. This provides concerns as to the openness of the architecture. If the interfaces and the function descriptions are not freely available for all to use, it will not adhere to the definition of an open architecture defined above. 4.4.4.2 Simulation Assessment Validation Environment The purpose of the Simulation Assessment Validation Environment (SAVE) is to provide an integrated suite of virtual manufacturing tools to help users meet affordability goals during weapon systems development 20. Managed by Lockheed Martin Aeronautical Systems, the project is focused on the Joint Affordable Strike Technology (JAST) program. SAVE integrates Dassaults CATIA CAD system, Denebs IGRIP, Ergo and Quest software, Pritskers FACTOR/AIM system, Cognitions Cost Advantage, SAICs ASURE, IBM/Techno-matixs VSA, and Decision Dynamics Design/Production Model into one seamless system. This will allow the users to apply collaborative virtual manufacturing concepts to reducing the life cycle costs, schedule requirements, and risks associated with weapons system development, with specific, eventual application to JAST. The SAVE technology is based on a core of technology developed for the Rapid Prototyping of Application Specific Signal Processors (RAASP) program. In addition to the core technology from the RAASP program, SAVE incorporates a SAVE Development Environment (SDE) whose encapsulation techniques allow users to integrate a wide variety of virtual manufacturing tools without modification to the tools or development of a special edition of the tools. SDE also will use the CORBA for standardizing object message passing protocols across a distributed, heterogeneous environment. SAVE allows independently functioning simulation models to seamlessly pass key variables and data from one model to another, thus allowing the user to address complex virtual manufacturing scenarios quickly and easily.
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Key components of SAVE are: 1) the common desktop for the user interface; 2) the communications layer; 3) a repository containing the SAVE database of design/product data, models, libraries, and documentation; and 4) a common data model and system of translators. The common desktop provides access to the system and all the requisite data which is stored in the repository called the SAVE Product/Process Database (SPPDB). The SPPDB can have multiple databases beneath its interface, and each database can reside on remote computers. In Phase I remote data access is accomplished by NFS and FTP services. Core utilities such as process, project, configuration, and requirements management, are included in the Communications layer. More sophisticated methods of network access will be provided in Phase II. In its first phase, SAVE is being tested and validated on the F-16 horizontal stabilizer. In the second phase, technology will be added from the Simulation Based Design program, collaborative environments from the Agile Infrastructure for Manufacturing Systems project, and intercompany information transfer and security technology from the National Industrial Information Infrastructure Protocol program. SAVE is an interesting attempt to integrate modeling tools for manufacturing. While it is achieving that goal, the very goal makes it restrictive and not widely applicable as a framework. The common and metadata files, however will be able to be used by other frameworks. 4.4.4.3 Infrastructure Services Architecture for Rapid Response Manufacturing This is a description of an architectural framework for the implementation of an effective and evolvable engineering environment involving diverse applications1. The principal goals of this architecture, which is part of the Rapid Response Manufacturing Consortium, are to: Enable evolutionary environment Provide mechanisms through which Diverse applications across diverse disciplines can share information Product information can be exchanged amongst a company, its customers, and other business partners Legacy applications can be integrated Minimize independent entry and modification of dependent data Minimize in-house development of software and utilities. A key aspect of this architecture is that it must be defined within the context of the business process. An implicit attribute of this proposed architecture is that it is tied to appropriate engineering of the business process. Four zones are recognized: strategic, tactical, operational, and execution. In addition a fifth zone which cuts across all four of these zones is the management business domain. It provides a useful way of looking at the way in which information systems should be designed and implemented but, has not yet been implemented. The latest version appears to use CORBA for standard message passing protocols. STEP is used for data exchange, but its limitations are recognized and accounted for. As far as we are aware, this architecture has not yet been implemented. 4.4.4.4 Data Integration and Synergistic Collateral Usage Study The Data Integration and Synergistic Collateral Usage Study (DISCUS) has developed a framework for the integration of software applications in distributed workstation environments35. The DISCUS framework provides an industry-standards-compliant approach to integrating commercial off-the-shelf/government offthe-shelf (COTS/GOTS) systems and prototypes. The framework enables low-cost integration of prototype technology in pilot operational environments. Cost of integration will be reduced due to the commonality of interface descriptions and the reusability of interfaces between alternate applications and platforms. New end-user functionality will be provided through increased capabilities for application data interchange and distributed application control. The framework will enhance the extensibility of operational environments, allowing increased use of COTS and leading-edge research technologies. The DISCUS framework defines a set of operations which facilitate interoperability among applications and between applications and data sources. It does not define the implementations of the applications, data sources, or operations; it only defines the software interfaces. The DISCUS framework is a set of simple, ge-
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neric, standards-based interfaces for integrating tools and data sources. It defines four generic interfaces for all tools and data sources: exchange, convert, query, and execute. Exchange provides data interchange between applications. Convert is a data format conversion operation. Query is the generic interface for data sources. Execute is the generic interface for scriptable applications. The DISCUS framework is based upon standards for object management. Object management technology provides portable facilities for communication and system services that allow applications to interoperate without concern for hardware/operating system differences, physical distribution, and programming language dependencies. Object management consists of these elements in an Object Management Architecture: Object Request Broker (ORB), Interface Definition Language (OMG IDL), Object Services, Common Facilities, and Domain Interfaces. An ORB is a distributed operating system facility which manages the selection between method implementations of service requests and translation of data between communications, hardware, and language-specific formats. DISCUS is based on the Common ORB Architecture (CORBA) framework, adopted by the OMG, through which different ORB implementations can provide common ORB services and interfaces to support portable clients and object implementations. The DISCUS testbed, a working implementation of the DISCUS framework, is completely specified in OMG IDL. OMG IDL, defined in the CORBA Specification, is used to define all interfaces to CORBA. Unfortunately, there does not appear to be much information freely available to the public on this system and it is not certain what its status is. 4.4.5 Future Stretch Goals Frameworks are all about component software and software re-use. As frameworks become more ubiquitous and standards for the interfaces to the system and between modules become standardized, further development of the modules will occur. The component will be able to describe (announce) itself to the system and the system will be able to respond to the description in a predictable manner. This will require standards for the interface between the module and the framework. The system will be able to recognize the communications protocol, the interface description language (not to be confused with CORBA Interface Definition Language), the concepts that are being conveyed via the interface definition language, a process definition language and concepts, and a data definition language and concepts. Alternatively, the interface description provided by the component may be one of a list that is recognizable by the system itself. By system in this case we mean the set of shared services and software components already defined in a particular instance of an NGM framework. The process, behavior, information, interface definition languages, and a common understanding of the concepts being conveyed by these languages will be standardized and the framework will contain a set of services that will manage the recognition and self integration of the software components. Issues of security, trust, competence, payment, negotiation, etc. will be handled by specialized services (other modules) within the framework. Standards development is a key, whether by de facto or formal industry consensus. Either way, given agreement, a certain amount of validation testing (i.e., does a specification do what it intends to do) and conformance testing (to what degree does an implementation conform to a specification) will be required. In addition, we need the process of consensus building and testing to be very fast so we will need support in the way of standards development tools, test suits, and procedures. In addition, we will need some determination as to which standards and pre-normative specifications will work with one another and in which manufacturing context are they best suited. Some projects addressing some of the issues involved in achieving such a utopia are described below. 4.4.5.1 NIST National Advanced Manufacturing Testbed Framework Project NIST's Manufacturing Engineering Laboratory (MEL) has worked with its constituents to establish an agenda for development of technology, measurement, and standards for the U.S. manufacturing community. In 1996, MEL inaugurated the state-of-the-art National Advanced Manufacturing Testbed (NAMT) 36. Using the NAMT, MEL and its partners will integrate, operate, test, benchmark, and refine advanced manu-
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facturing technologies and standards for information-driven design, engineering, and manufacturing operations. The NAMT Framework project has as its principal objective the development of manufacturing systems interoperability standards in collaboration with U.S. industry. The NAMT Framework project will instantiate, from pre-normative specifications and protocols as well as from normative and de facto standards, a manufacturing system infrastructure that supports distributed engineering and production operations. This infrastructure will be the experimental basis for further development and evaluation of manufacturing system interoperability standards, specifications, and protocols required to meet the business objectives of U.S. industry. Sources of these standards, specifications, and protocols include: ISO 10303 - Standard for the Exchange of Product Model Data (STEP) ISO 14258 - Concepts and Rules for Enterprise Models OMG - Object Management Architecture (OMA) SEMATECH - Computer Integrated Manufacturing Applications Framework Specification National Industrial Information Infrastructure Protocols - NIIIP Reference Architecture Document Technologies Enabling Agile Manufacturing (TEAM) - Technical Architecture Specification (TAS) NIST Manufacturing Engineering Laboratory - programs of the Manufacturing Engineering Laboratory.
The NAMT Framework project will apply this experimental infrastructure against actual manufacturing operations in NIST's laboratory setting. The first of these operations will be the automated inspection of mechanical parts. Subsequent operations will include hexapod-based machining and precision turning. In addition, the infrastructure will be evaluated against virtual manufacturing operations such as the virtual machine produced in the NAMT Machine Characterization project and the simulated hexapod produced as part of the NAMT Hexapod project. Other manufacturing operations will be deployed at NIST and at partner sites to further the development and acceptance of emerging systems integration specifications. The NAMT Framework project will produce a physical system available to researchers working on the development and evaluation of standards, protocols, and specifications. These researchers will represent a broad cross section of the manufacturing community. They represent industrial consortia, standards bodies, industry focus groups, individual companies, academic research institutions, and government agencies. Initially, the NAMT Framework project will collaborate with: NIIIP - National Industrial Information Infrastructure Protocols consortium SEI - Software Engineering Institute SEMATECH - Semiconductor Manufacturing Technology consortium TEAM - Technologies Enabling Agile Manufacturing.
In general, the NAMT Framework infrastructure will identify classes of manufacturing software applications, will identify interface definitions for those classes of applications, and will designate services to support the interactions between those applications. The NAMT Framework will be a laboratory tool for evolving the interface definitions from concept through standardization. Furthermore, the Framework prototype will permit evaluation of new software services that could enable manufacturing systems to interoperate in a manner consistent with new business practices. While the NAMT Framework project is not a conformance testing project, the testing and evaluation performed in this project is expected to provide a foundation for conformance testing in the future. In particular, the NAMT Framework project will instantiate specifications defining interfaces for product data management, object-oriented database, factory control, workcell control, and factory scheduling classes of manufacturing applications. The interface definitions will be based on models of manufacturing information emerging from the ISO community (ISO 10303 - STEP), current commercial software interfaces, protocols, and specifications developed by national infrastructure technology development programs, as well as NIST laboratory programs. The services enabling interactions among the classes of manufacturing applications will be based principally on the Object Management Group Object Management Architecture,
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SEMATECH CIM Applications Framework, the NIIIPs, ISO 10303 STEP Standard Data Access Interface (SDAI), as well as other national technology and standards development programs. The NAMT Framework project will work closely with these organizations to further the development, utility, and acceptance of the specifications, standards, and protocols. The NAMT Framework is under development at this time. 4.4.5.2 Systems Integration Architecture Project The Systems Integration Architecture at the Agile Aerospace Manufacturing Research Center of the Automation & Robotics Research Institute at the University of Texas at Arlington is a project to explore the issues arising when the basis model outlined above is implemented 16. The approach taken is to develop an infrastructure which will supply basic services for the identification, creation, and modification of transforming modules, their interface data sets, and their modalities; their composition into more complex transforming modules; and their enactment, monitoring, and control. The SIA architecture Figure 4.4.5.2-1 is highly modular and tries to use the same basis model as it will support. SIA recognizes three main classes of services required: communications including distributed object messaging, data management including administrative data about users and projects (called the Librarian module), and control including system, module, and data interface access, module enactment, and control (called the Executive module). Although the basis model outlined above uses the functional paradigm of computing, SIA implements this in an object-oriented paradigm, thus, using the advantages of both.
Executive Module User Interface Executive Control Subsystem Librarian Module Function Module
Database Distributed Aspects FTA/Aspect Management Admin Data Management FTA 1 T N FTA 2 FTA
Executive Server
Executive Buffer Subsystem
Librarian Buffer Subsystem
FTA Dispatcher Subsystem
Executive Communications Subsystem
CORBA DCE/RPC TCP/IP Sockets HTTP
Librarian Communications Subsystem
CORBA RPC TCP/IP Sockets HTTP
Dispatcher Communications Subsystem
Communications Module
Figure 4.4.5.2-1. Systems Integration Architecture The highly modular design of SIA allows any one module to be replaced by another with similar functionality. Hence, the user interface can be replaced with a commercial package, which provides work flow management functions. The executive control subsystem allows one to replace it with different types of control paradigm including that necessary for agent-based technology. The database used to store meta-data can be easily replaced with another database manager and the FTA/Aspect and Admin data management modules are designed to be replaced by commercial product data manager and work flow managers. The message passing communications layer allows for the dynamic switching between diverse protocols such as RPC, CORBA, http, and OLE depending on the server on the machine providing the transforming functions.
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SIA is different from the frameworks outlined above in that interface standards to the framework are flexible. Modules not really plug into the SIA framework in a standard way but are registered with it (in the Librarian) along with their data interfaces and are launched by it, wherever the module resides. SIA integrates through references and associations. References are, in essence, pointers to entities on the network. For example, a transforming module may reside on computer arris03.uta.edu with a specific path. This information is kept in the Librarian. Associations are connections of various sorts between entities. For example, there exists a connection between a transforming module (on computer arris03.uta.edu/project/SIA/modules) and the data set (on arribot.uta.edu/project/SIA/data) it transforms. Associations can also be established between people and projects, projects and data, and people and data. SIA looks at integration more from the user perspective than that of the implementer. To a user, integration exists when the user has immediate access to the function and data required for them to do their job without regard to where that function or data resides. SIA provides a common launch module which can run on any machine, but the server accepting the message to launch can be CORBA-based, http-based, DCE-based or even distributed OLE-based. The system accommodates and accounts for all. SIA is in the fourth cycle of a helical development model and will be operational using a modular design system from Purdue University as the first set of transforming modules to be integrated. Plans call for the integration of a product data manager, a simple workflow manager, and a project manager system with the executive and librarian, allowing the user to access different versions of the same functional transforming modules to build integrated processes.
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5.0 ACTION PLANS No action plan is required for the basis model. However, if information system developers would recognize the importance of having a good basis model or architecture, it will become much easier to understand what is being developed and how information infrastructures will play a role in the NGM Enterprise. 1. Develop and implement more robust and responsive standards. This action includes acceleration of the standards creation process and identifying means of exchanging and sharing not just geometric data but parametric data, design rules, linked text with graphics, images, and design knowledge process knowledge. Develop new approaches to the creation of standards so that they can be created on the fly. The standards-making process takes far too long and technology often bypasses it. STEP for geometric data is only now, after 10 years, beginning to be used and there is still much doubt that the DXF format is beginning to replace IGES. The standards-making bodies and NIST must find faster ways for introducing effective standards. Most information technology standards efforts focus on exchange and sharing of geometric data. However, there is a strong trend in the user community to parametric design where non-geometric data describing design intent is associated with the geometry. This includes equations describing the relationships between geometric entities and rules covering the use of these equations, and their relationship to the materials, tolerance, fit and surface finish, etc. Standards for other product and process data (text, images, process plans, design rules, etc.) are badly needed and their development must be accelerated. The stakeholders for this action include NIST, users, technology suppliers, standards consortia (e.g., PDES, Inc., the Object Management Group, NIIIP consortium, and SEMATECH), and the standards bodies (NEMA, ANSI, ISO). The ISO fast track process needs to be made even faster. As integration frameworks become used, standards will become imperative if diverse companies wish to collaborate and share and exchange product and process information. This action will facilitate IPPD among disparate companies forming an alliance to attack a fleeting market. The benefits of having standards for all data shared and exchanged between companies are immense. The costs are much smaller but are not insignificant. Perhaps as much as $100 million needs to be spent on developing standards over the next 5 years, but the benefits could easily be 10 times that. 2. Increase the bandwidth of the Internet and make the high bandwidth readily available to the national manufacturing base. Much of the current Internet connectivity has too low a bandwidth for the transmission of large volumes of data. Ignoring World Wide Web communications (impossible to do, but we do it to make a point), the rate of growth of data transmission for design and manufacturing purposes is likely to grow 100-fold over the next 5 years. This alone will bring the current Internet to a stop. The government needs to encourage telecommunications suppliers and the organizations maintaining the connections to the Internet backbone to invest in significantly higher bandwidth communications links. Telecommunications companies need to find the investment needed to carry the traffic of a combined World Wide Web and data exchange by companies. We may have to go to a similar arrangement to the telephone system, where we pay for connect time between two parties. Connections to this high-bandwidth network need to be able to handle 100 times the current data rates of modems at the same cost. The connectivity needs to be extended to not only companies, but educational institutions and research centers as well. The high-bandwidth connectivity provided by the proposed network is the building block for the NGM information system. Without dramatically higher bandwidth/speed, we will not be able to exchange and share data fast enough to be competitive. For example, if exchange of a data file takes 40 minutes, after 10 such
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exchanges, a company with access to bandwidth providing exchange of data in 4 seconds is more than 2 weeks ahead on any schedule. Cost and benefits of this action are difficult to quantify, but cost/benefit ratios of greater than 10 should be possible. The cost of a new, high-bandwidth national network infrastructure is estimated in the hundreds of billions of dollars, but the upgrade can be made over a decade, and if proper charging mechanism can be found, it should pay for itself. 3. Combine message passing protocols into one standard, and standardize on a common server protocol. As we move toward more remote computing, distributed object-oriented programming, collaboration etc., the current plethora of disparate communications protocols (i.e., DCE, CORBA, http, OLE) will make it difficult to integrate the various components and data into a whole system. For example, applications on a machine with an http server will not respond to a message communicated through CORBA or OLE. The organizations setting these standards must collaborate and come up with a common suite of standards. Stakeholders of this action include the Distributed Computing Environment Consortium, The Object Management Group, Microsoft Corp., the HTML/HTTP Working Group, UNIX vendors, and communication systems vendors. While high-bandwidth communications is the foundation of the responsive information system house supporting NGM, the standardized communication protocols, specifically those for object message passing, form the electrical system of the house. Without these, creation of information systems that can readily be reconfigured will be severely hindered. Cost and benefits are difficult to estimate, but that effort should not cost much more than is currently spent developing the individual protocols. The payoff would be enormous. 4. Encourage use of modular software and integration frameworks for future information systems, and support transition of software developers to the new basis model. Component software in the Adaptive, Responsive Information Systems concept requires standard interfaces to facilitate linking of components into processes. The interfaces defined here have two components: commands (e.g., APIs) and data sets, which are transformed by the component. The data sets have at least six attributes, four of which require standards and two of which require standard conventions for naming and storing. This action impacts all of the NGM attributes and other imperatives, since information flow throughout the enterprise is critical to all aspects of the NGM enterprise. This is fundamental to adaptive, responsive information systems. This action needs to come from a user organization with significant influence, since there is no current incentive for vendors to change the way they do business. Stakeholders include all who manage an enterprise, and the information systems vendors. The cost to users will be in the salaries and travel of those they involve in establishing the standards for the attributes. The benefits will be enormous. If the information systems of the top 500 major corporations were to be changed using current technologies, the cost would be in the billions. With component software and information infrastructures, much of that can be modularized and reused, thus avoiding total replacement costs. An additional, difficult-to-estimate benefit is the ease with which new alliances can be created to attack fleeting market demands. The cost of lost sales is inestimable. 5. Support research on integration frameworks and on integration in dynamic heterogeneous environments with the goal of developing a theory of integration on which future advances can be founded. The advances in responsive information systems, the World Wide Web, remote computing, and distributed data are all advancing without much fundamental understanding underneath it all. Progress is ad-hoc not because we have no theory being put into practice but because there is no theory. We need to better understand the issues involved and work towards a theory that encompasses all the various paradigms, concepts, domains and approaches, which can then be used to steer development to the next plateau of performance.
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With the current ad-hoc approach to information systems, the danger is that we end up with many competing approaches, all of which have value, none of which can communicate or even understand one another. If this situation arises, we will be no better off than we are today with the plethora of standards for a single application domain.
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6.0 SOURCES
1 2
Private Communication, L. Johnson, Texas Instruments, Summer 1994. Pahl, G. and Beitz, W. Engineering Design: A Systematic Approach, ed. K. Wallace, The Design Council, London, U.K., 1988. Suh, N. The Principles of Design, Oxford University Press, 1990. Nevill, G.E. Computational Models of Design Processes," in Design Theory '88, S.L. Newsome, W.R. Spiller and S. Finger, Eds. Springer Verlag, NY pp. 82-110, 1988. G. Booch. Object Oriented Design with Applications , pp. 3-23, The Benjamin/Cummings Publishing Company Inc., Redwood, California, 1991. Mettala, Eric. The University of Texas at Arlington, October 1994. JTA Overview, 9 July 1996: VERSION 1.0, published by the Department of Information Systems Management: information available at http://www.itsi.disa.mil/jta/ Anon. "CIM-OSA Reference Architecture Specification," ESPRIT Project No. 688, pub. by CIM-OSA/AMICE, Brussels, Belgium, 1988. Kramer, T.R., Palmer, M.E. and Feeney, A.B. "Issues and Recommendations for a STEP Application Protocol Framework," NISTIR 4755, 17 January 1992. Bond, A.H., and Ricci, R.J. "Cooperation in Aircraft Design," Research in Engineering Design , Vol. 4(2), pp. 115130, 1992. Fulton, J.A. "PDES/STEP Model Unification: SUMM," Product Data International, pp. 6-7, May 1992. Balzer, R., Goldman, N., and Wile, D. "On the Transformational Implementation Approach to Programming," Proc . 2nd International Conference Software Engineering, pp. 337-343, 1976. Sthanusubramonian, T., Finger, S, and Rinderle, J. "A Transformational Approach to Configuration Design," in The 1992 NSF Conference on Design, pp. 419-424, 1992. Talukdar, S.N. and Fenves, S.J., Towards a Framework for Concurrent Design, in D. Sriram et. al, ComputerAided Cooperative Product Development, MIT-JSME Workshop, Lecture Notes in Computer Science No. 492, Springer-Verlag, pp. 140-151, November 1989. Mills, J.J. A Basis Model for Agile Computer Integrated Manufacturing, Proceedings of the Third International Conference on CIM, Singapore, 9-14 July 1995. Mills, J.J., Elmasri, R., Khan, K., Miriyala, S., and Subramanian, K. The Systems Integration Architecture: An Agile Information Infrastructure, in Information Systems Development for Decentralized Organizations, Eds. A. Solveberg, J. Krogstie, and A.H. Seltveit, Chapman Hall, 1995. Senehi, M.K., Wallace, S, Barkemeyer, M.E., Ray, S.R. and Wallace, E.K. "Manufacturing Systems Integration Initial Architecture Document, NIST Interagency Report 91-4682, September 1991. National Industrial Information Infrastructure Protocols program, information available on the World Wide Web, http://www.niiip.org/, 1996. Defense Information Infrastructure: Common Operating Environment Introduction & Run Time System Document: REV2.0, information available on the World Wide Web at http://spider.ims. disa.mil/dii/index.html Simulation Assessment and Validation Program documents are available on the World Wide Web at http://skipper.mar.external.lmco.com/save/ Technical Architecture For Information Management, published by the Department of Information Systems Management; information available on the World Wide Web at http://www.itsi.disa.mil/cfs/ tafim.html
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Information on the TEAM Technical Architecture is available on the World Wide Web at http://cewww. eng.ornl.gov/team/tas/tas.htm McCrum, W.A. and Beauchamp, K.G. "Open System Interconnection," Information Technology and the Computer Networks, Springer-Verlag, New York, 1984. The Common Object Request Broker Architecture and Specification, 1993, by Digital Equipment Corporation, Hewlett-Packard, HyperDesk Corporation, NCR Corporation, Object Design Inc., SunSoft Inc., and the Object Management Group, Rev 1.2. DCE information is available from the Open Software Foundation at http://www. opengroup.org/tech/dce/ Information on the Machine Tool Agile Manufacturing Research Institutes Software Tools is available on the World Wide Web at http://mtamri.me.uiuc.edu/software.testbed.html Information on the European Computer Manufacturers Association is available on the World Wide Web at http://www.ecma.ch/ A Reference Model for CASE Frameworks Technical Report ECM A TR/55, Available on the World Wide Web at http://www.ecma.ch/ Chen, M. and Norman, R.J. A Framework For Integrated CASE, IEEE Software, March 1993. Jarke, M., Strategies for Integrating CASE Environments, IEEE Software, pp. 54-61, March 1992. Wasserman, A..I. "Tool Integration in Software Engineering Environments," Proc. Int'l Workshop on Environments, F. Long, ed., Springer-Verlag, Berlin, pp. 137-149, 1990. Brown, A.W. and McDermid, J.A. "Learning from IPSE's Mistakes," IEEE Software, pp. 23-28, March 1992. CAD Frameworks Initiative, see World Wide Web http://www.cfi.org/ SEMATECH CIM Application Framework Specification V 1.3, published by SEMATECH, 1994, available on the World Wide Web at http://www.sematech.org/public/cim-framework/docs/spec_13/index. html The Data Integration and Synergistic Collateral Usage Study, see World Wide Web http://www.serve. com/mowbray/discus.html, 1996. National Advanced Manufacturing Testbed, see World Wide Web http://elib.cme.nist.gov/msid/projs/ simapm/sima.htm
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Extended Enterprise Collaboration

January 1997
Prepared By: The NGM Advanced Enterprise Concepts Thrust Team
CONTRIBUTORS Nick Franklin, General Motors Delphi Saginaw, Team Leader Jim Bronson, HJB Associates, Lead Author Bob Boykin, Consortium for Advanced Manufacturing International Dudley Caswell, Enterprise Innovations Bob Ellinger, Northrop Grumman Bob Graham, Rochester Institute of Technology Noel Gries, University of North Carolina Jason Motsko, Agility Forum Kenneth Preiss, Agility Forum and Ben Gurion University of the Negev, Israel
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CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 Imperative Definition ............................................................................................................................. 3 1.1 The Case for Change ...................................................................................................................... 3 1.2 Collaboration.................................................................................................................................. 3 1.3 The New Competitors .................................................................................................................... 4 1.4 Stakeholder Satisfaction .................................................................................................................. 4 1.5 Variety of Partners .......................................................................................................................... 4 1.6 Multi-Level Direct Sharing ............................................................................................................. 5 2.0 Attributes of the Extended Enterprise .................................................................................................... 7 3.0 Why Collaborate ?................................................................................................................................... 8 3.1 Current Reactions to Change............................................................................................................ 8 3.2 Sourcing Dilemmas .......................................................................................................................... 8 3.3 Future Trends................................................................................................................................... 8 3.4 A Call to Action................................................................................................................................ 9 3.5 Benefits............................................................................................................................................. 9 3.6 Additional Complexity ..................................................................................................................... 9 4.0 Enablers ................................................................................................................................................ 10 4.1 Collaborative Relationships............................................................................................................. 11 4.2 Core Competencies......................................................................................................................... 14 4.3 Customer Focus.............................................................................................................................. 15 4.4 Legal and Financial Facilitators ....................................................................................................... 16 4.4.1 Legal Relationship Facilitators............................................................................................... 16 4.4.2 Financial Relationship Facilitators ......................................................................................... 18 4.6 Business Systems............................................................................................................................. 19 4.7 Other Enablers Addressed in NGM Imperative Papers ................................................................... 24 5.0 Action Recommendations .................................................................................................................... 26 Appendix A - Strategic Supply Chain Management Axioms ......................................................................A-1 Appendix B - Glossary ................................................................................................................................A-2
ACRONYMS & ABBREVIATIONS ABC AMD AMP ARRI AVE CAM-I CIV DARPA ECI EDG FASB GAAP NCMS NGM NLRB OECD QCAE SEC SSCM TEAM Activity-Based Costing Advanced Micro Devices Agile Manufacturing Program Automation and Robotics Research Institute, University of Texas at Arlington Agile Virtual Enterprise Consortium for Advanced Manufacturing International Calculated Intangible Value Defense Advanced Research Projects Agency Electronic Circuits, Inc. Enterprise Development Group Financial Accounting Standards Board Generally Accepted Accounting Principles National Center for Manufacturing Sciences Next-Generation Manufacturing National Labor Relations Board Organization for Economic Cooperation Development Qualification Criteria for Agile Enterprises Securities and Exchange Commission Strategic Supply Chain Management Technologies Enabling Agile Manufacturing
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EXECUTIVE SUMMARY An Extended Enterprise is the seamless integration of a group of companies and suppliers (industrial, educational, investment, and governmental) that collaborates to create and support a timely and cost-effective service or product. Why is it Important? Collaboration is required so that people and processes are dynamically connected and combined effectively and efficiently among the Extended Enterprise partners. Collaboration maximizes the combined competencies of the partners to achieve each partners strategic goals and to provide solutions to meet customers and stakeholder needs. The need for collaborative partnering is driven by the increasing range of competencies needed to produce products and services in the rapidly changing global competitive environment. The cost of maintaining a complete set of vertically integrated competencies is becoming prohibitive for most businesses, making partnering mandatory to successfully address customer needs. Global markets demand local presence in multiple markets. This requires increased partnering of organizations focused on common goals. Extended Enterprise collaboration is a pathway along which individual companies, in association with other companies, academia, and government, can improve the odds of making a successful transition to the NGM environment through collaboration with other companies. The forces on companies now and in the future will demand that most will actively collaborate to survive. Competition will be between Extended Enterprises, not just between companies. Key Concepts Competition will be between value chains (extended enterprises), not between companies. Teaming and Partnering will become the crucial skills at which the NGM company will have to be very proficient and measurable in order to be suitable for inclusion in most Extended Enterprises. Collaborative Extended Enterprises will bring together complementary sets of competencies to address a market opportunity. Successful participation in collaborative Extended Enterprises will require new skills and new business processes and practices. Significant among them will be: Ability to create, sustain, and amicably dissolve relationships with partners having diverse business practices and cultures Willingness to accept increased risk and reward to optimize potential return to all the stakeholders of the Extended Enterprise. These collaborative ventures will take several forms, including a value network, web, or chain in which the partners may be sharing and exchanging other resources in addition to value-added material. In an extended enterprise, all individuals and institutions, including the customer, are equal stakeholders and have varying degrees of commitment and risk. Most NGM companies will have to sustain multiple simultaneous cooperative relationships, some of which will compete with each other. New business practices and processes are needed for rapid formation, morphing, and dissolution of Extended Enterprises that allow it to be dynamic without penalizing its partners. The abilities to establish trust quickly, create a vision for the collaboration, and agree upon a common set of goals, metrics of success, and a shared risk/reward agreement are crucial to address market opportunities in a timely manner. Whats New New levels of trust based partnering, beyond current legalistic behavior Ability to rapidly form and dissolve Extended Enterprises Competition between, and optimizing of, value chains rather than individual companies Expanded levels and implications of taking risk.
Action Recommendations 1. Cooperatively create a nationally accessible data system consisting of companys evaluated capabilities, facility capacity, technical assets and expertise to allow easy identification of potential enterprise partners, including small suppliers and technology partners. 2. Establish a Collaborative Extended Enterprise Laboratory to pilot and validate tools, approaches, and practices supporting extended enterprise concepts. 3. Develop a system of trust brokers to be intermediaries in the formation of extended enterprises. 4. Establish national accounting standards for valuation of intellectual and intangible assets. 5. Develop and pilot measurement systems that address the value of time and its relationship to other measurements. 6. Cooperatively create and codify legal structures that facilitate extended enterprises. 7. Develop methods for analyses of risks/rewards of the extended enterprise concept to evaluate the viability and financial benefits of collaborative partnering. 8. Develop intellectual property agreement models that any company can use to simplify rather than hinder formation of extended enterprises. Characteristics of the Next-Generation Business Environment: A Look at New Business Characteristics and Their Metrics The following chart summarizes some of the characteristics of current business practices and indicates the direction these practices need to move to support an NGM company participating in Extended Enterprises.
Today Assets must be physical, tangible and have a netpresent taxable value Cost + Profit = Price Trust established by performance over time Vertical integration Training for tactical events Learning for reward Parochial viewpoint U.S.-based values Time to (any process or activity) measured Fixed price relationships Single-event capital rationalization Tomorrow
Expanded definition of assets to include information, knowledge, people, training, etc. Value Cost = Profit Brokered relationships Focused core competencies Continuous training Learning to maximize employability Global, multi-cultural vision Values that embrace global local market needs Time to (any process or activity) treasured Shared risk/reward Investments reused on future projects
New Metrics for Collaboration In addition to the classical metrics of success (profit, etc.), NGM companies will want to institute additional metrics to assess progress on the journey to skillful collaboration. Some suggested metrics are: Percentage of people trained in Extended Enterprise skills Turnaround time to identify sources of needed core competencies Turnaround time to form an Extended Enterprise Continuous reduction of the ratio of value-added work time versus total process time Assessment of commitment to collaboration by measuring both the velocity and rate of change of the commitment Ratio of success versus attempts to dynamically link processes between partners Percentage of core competencies validated for national registry Percentage of investments that significantly reduce time to accomplish a process.
1.0 IMPERATIVE DEFINITION
In the race to the future, there are drivers, passengers, and road kill.
C.K. Prahalad
1.1 The Case for Change History shows us that fewer than 25 percent of companies successfully make the transition through an era of discontinuous, kaleidoscopic change of the economic environment. According to the information from Dr. Michael Daugherty at Illinois State University, of the 49 companies featured in the 1985 book, In Search of Excellence , only nine remain in business. The world of manufacturing is in the midst of a discontinuous change from the mass production paradigm to knowledge-based competition of customized products and services. Surrounding that change is a kaleidoscope of accelerating vectors including technology, market access, communications infrastructure, transportation systems, new methods of commerce, increasing customer selectivity, and demand for custom solutions. The move to collaborative partnering is driven by the increasing range of core competencies needed to develop products and services in the rapidly changing global economic environment. This environment creates markets segmented not only geographically, but by variations in customer demands. This leads to a wide spectrum of customer desires and requirements in markets previously addressable by mass production. Companies and Extended Enterprises agile enough to address these niche markets with viable solutions are more likely to remain in business than those that cling to mass production as the way to fulfill customer demands. Also, technology is changing at an unprecedented and accelerating rate, and most organizations that continue to vertically integrate will soon have resource limitations. They will be unable to maintain all the needed core competencies at a level that distinguishes them in the marketplace. Only by collaborative teaming will nextgeneration companies be able to access and integrate the necessary competencies. The resource base of competencies needed by the value network must be easily and continuously changed as new technology and economic environments drive competitive evolution. Business environments will continue these radical changes into the next century. As noted in Tysons Competition in the 21st Century , survivors will successfully transition from the Information Age of this century to the Intelligence Age of the next century. Success in the future will depend on linking business intelligence to a perpetual strategy process. This will require them to be linked through a structured decision-making process using a multi-attribute decision model. This Extended Enterprise Collaboration Imperative paper is the result of an industry-led effort to determine a pathway along which individual companies, old or new, and in association with other companies, consortia, academia, and government, can improve their odds of making a successful transition to the new competitive environment. 1.2 Collaboration The seminal feature of the NGM concept is the timely and cost-effective integration of competencies among companies the Extended Enterprise. These companies will be linked to create a service or product and support it for its service life, including final disposal. Integration is required so that people and processes are connected and combined efficiently among the collaborative partners. This partnership maximizes combined competencies to achieve each companys strategic goals and provide solutions to meet their customers needs. These collaborative groups of businesses will bring together complementary sets of competencies to address new market opportunities. Successful participation in collaborative Extended Enterprises will require new skills and new business processes and practices; significant among them are the ability to create, sustain, and amicably dissolve relationships with partners having diverse business practices and cultures. Also important is the willingness to accept increased risk and to reward risk-taking within the relationship to optimize potential return to all stakeholders of the Extended Enterprise.
The move to collaborative partnering is driven by the increasing range of competencies needed to produce products and services in the rapidly changing global competitive environment. The cost of maintaining a complete set of vertically integrated competencies that can compete with the best competencies in the world is becoming prohibitive for most businesses, making partnering mandatory to successfully address customer needs. Many organizations are learning that the building blocks of their corporate strategy include not only products or markets, but also certain business process competencies. Competitive success, in turn, depends on transforming these key competencies into strategic capabilities that provide superior value to a customer. Participation in collaborative Extended Enterprises will enable the NGM company to maximize the leverage of its competencies as well as those of its partners. The partners that form an Extended Enterprise are energized by the need to link together to address a business opportunity. These ventures will take several forms including a value web or chain in which the partners provide resources as well as value-added material. Successful participation in these collaborative Extended Enterprises, where many NGM companies will have multiple simultaneous relationships, will require expanded management vision, skill sets, and flexible business practices. A proactive approach to partnering with customers will not only become common practice, but the process will be increasingly sophisticated. To maximize growth and profitability, the NGM company must master the skills to meet the needs of all stakeholders which may include customers, equity holders, employees, and the communities in which they operate in addition to their collaborative partners. 1.3 The New Competitors In tomorrows competitive environment, companies will not compete just with other companies, but against value webs, networks, and chains that in turn compete with other value networks. The need for both rapid formation and dissolution of collaborative Extended Enterprises demands creation of new business practices and capabilities. The Extended Enterprise must have business processes that allow it to be dynamic without penalizing past, current, or future partners. The ability to establish trust quickly, create a vision for the collaboration, and agree on goals, metrics of success, and shared risks/rewards will be crucial to address market opportunities in a timely manner. Credentials for having worked successfully in such relationships will be a key enabler for rapid establishment of trust. The continued growth of the global information infrastructure will enable creation of knowledge nodes throughout the world. This will make almost any market vulnerable to competition. The NGM company will need to operate with the view that any of its markets can be penetrated and captured by competitors worldwide. It will be necessary to provide visionary leadership and promote a culture that understands, accommodates, and embraces diverse business practices and cultures. The NGM company also will need to be perceived as a contributor to the community for its local markets of products and services. The forces on companies now and in the future will demand that most will actively collaborate to survive. 1.4 Stakeholder Satisfaction NGM companies will become proactive in understanding and acting upon the worldwide influences of technology, environment, and politics on even small local niche markets. In many markets, customers want tailored requirements to satisfy needs and are willing to pay for the perceived added value. In many situations, customers will also become members of, and not just stakeholders in, the Extended Enterprise. 1.5 Variety of Partners Figure 1.5-1 illustrates the vectors for stakeholder relations of an NGM company. Today, such relationships are often characterized by firewall-style relations and voluminously documented contracts to deliver goods at a specified time for a negotiated price based on competitive bids. Tomorrows NGM company will have a variety of partners with various capabilities. Some will be selected and courted to become strategic partners with very high levels of collaboration; others will have less integrated roles. Many will continue to be on-call, prequalified suppliers. Some competencies will require virtual integration with strategic partners. Those relationships will be ones in which both parties will very carefully select suitable partners with whom to form Extended Enterprises. Partnerships of this nature will add significant complexity to most of the operations of the NGM company. These relationships will require continuing corporate investment to maintain.
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Figure 1.5-1. The New Collaborative Environment 1.6 Multi-Level Direct Sharing The next sections of this paper define in further detail the concept of the Extended Enterprise and discuss its attributes. The relationships of the components that differentiate an Extended Enterprise from traditional organizational concepts are discussed and the barriers and five key enablers of a collaborative relationship are defined. Figure 1.6-1 is a simplified sketch of an NGM company within an Extended Enterprise. It shows how the NGM company is surrounded by customers, partners, and suppliers with direct sharing at the strategic, operations, and process levels. This sharing includes materials, services, needs, information, and resources.
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Figure 1.6-2 illustrates the groupings of strategic enablers for Extended Enterprise collaboration as identified by the NGM Project team. The enablers for Collaborative Relationships, Customer Focus, Core Competencies, Legal & Financial Relationship Facilitators, and Business Systems (identified in the figure with a solid border) are discussed in detail in this paper. Those with dotted borders have influence and importance to Extended Enterprise collaboration and are addressed in detail by other NGM Imperative papers. In addition to the enablers discussed in the NGM attribute papers, it is presumed that companies desiring to establish collaborative partnerships of the type described in this paper will have previously created and documented business processes such as planning, marketing, purchasing, and assessment.
Core Competencies Customer Focus Business Systems
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NGM Responsiveness Attributes for Extended Enterprise Collaboration

Customer Responsiveness Teaming as a Core Competency Global Market Responsiveness Responsive Practices & Culture Human Resource Responsiveness
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Figure 1.6-2. Key Enablers for Collaboration
2.0 ATTRIBUTES OF THE EXTENDED ENTERPRISE NGM companies will exhibit the following attributes (in direct support of the NGM attributes identified in this papers Preface) to sustain themselves as participants of Extended Enterprises. The NGM Extended Enterprise: Will be capable of globally integrating the processes of manufacturing. These include all processes from gathering marketing requirements through product recycling. Will easily and dynamically change to accommodate changing environmental factors. Examples include new materials, socio-economic upheaval, ecological or green issues, niche opportunities. Will have collaborative leadership methods. These will allow matching products and/or services to customer desires while maximizing long-term benefits to all the stakeholders. Will have the vision and commitment to think and act globally while adding value locally. This will permit serving markets anywhere they exist. Will have the skills of competitive anticipation to envision and create new markets. They will utilize the marketing expertise of all members to provide necessary information. Is comprised of suppliers and customers in a wide variety of teaming relationships and commitments. These will be easily reconfigured and will provide benefits to all stakeholders.
3.0 WHY COLLABORATE? NGM companies will need to operate with the view that any market can be addressed by global competition. Outreach and a proactive approach to customer solutions will become common practice and increasingly more sophisticated. To maximize growth and profit, skills will be needed to accommodate and satisfy all stakeholders needs. These stakeholders may include customers, equity holders, employees, and collaborative partners. An embedded culture will have to understand, accommodate, and embrace diverse business practices and cultures. This dramatic shift in the way in which businesses manufacture products, provide services, and conduct business is being driven by increasing global competition, more selective customers, increasing market fragmentation, and accelerating technological advances. These factors require businesses to constantly enhance their abilities to competitively design, manufacture, and deploy products and services. Businesses will need to increase their research and development effectiveness, use a wider variety of competencies, sustain variable resources and assets, and access new markets across the globe. 3.1 Current Reactions to Change As the business environment moves through the discontinuous change from mass production to mass customization, the resulting chaos and unpredictability will make it mandatory to have strategies in place that successfully transport a company into the next era. In this environment clock time is the problem and fast innovation and change are the solutions. To compete successfully i.e., make money and stay in business each business will need the capability to rapidly respond to unexpected change, be it technical, environmental, regulatory, or political. In some cases, businesses will proactively cause the change themselves. Companies must become proficient at change, both anticipatory and reactive based upon market stimuli. New relationship skills, business systems/processes and practices also must be learned. These are needed to contribute successfully to the various forms of Extended Enterprises. Most businesses are choosing to concentrate resources on a reduced number of functions and processes, but being good at an activity usually is not good enough to prevent a superior competitor from usurping the market. In the next generation, that competitor will probably be in the form of an Extended Enterprise. 3.2 Sourcing Dilemmas Previously, vertical integration, where in-house control of everything was demanded, was thought to be the most efficient business strategy. The costs of maintaining a complete set of vertically integrated competencies are becoming prohibitive for most businesses, making partnering mandatory to successfully address customers needs. Now, vertical disintegration, or outsourcing, is regarded as an advantage. Therefore, companies must decide whether it is more efficient and consumes fewer resources to secure many goods and services from others rather than investing resources to become world-class in everything. Successful participation in collaborative Extended Enterprises will allow an NGM company to maximize the leverage of competencies in a relationship in which all collaborators thrive. However, some vertically integrated companies will continue to be successful because their total performance is quicker and more cost effective in a particular market. 3.3 Future Trends This trend toward vertical disintegration is anticipated to expand dramatically during the next 5 to 10 years. Identifying and establishing networks of competencies will be much more complex than routine make-versusbuy decisions. New global communications and transportation capabilities along with movement toward fewer trading boundaries adds to this need. The act of vertical disintegration creates the need for companies to be capable of global sourcing and certainly to face global competition in any local market. Almost no market will be safe from an innovative competitor, including even local niche opportunities. As more and more competitors are capable of addressing a chosen market, potential customers will be able to demand tailored and focused solutions for specific desires. For most markets, this increased accessibility by more competitors will increase the rate of change of products and options available to customers.
3.4 A Call to Action Responsiveness to rapidly changing market opportunities requires the ability to source goods and services, anticipate change, react to unexpected change, and continuously be quick to market with tailored solutions. These factors demand that individual companies become proficient at new and better ways to relate to both customers and suppliers. These new relationships will be collaborative in nature. These collaborative relationships are different from the classic quote, order, deliver relationships between buyer and seller. Generally these relationships will be characterized as moving toward partnerships. They will exhibit evidence of mutually shared common goals, success metrics, and reward and risk sharing. The collaborative ventures will take several forms including a network or web in which the partners may be providing each other resources in addition to valued material. They may exist to address a market opportunity recognized by one of the members or may, in fact, pre-exist for some previous purpose and be looking for a new market opportunity. Highly integrated relationships will be created only where core competencies must be combined to create a synergistic effect for both partners. Other relationships in value networks or webs will not have this degree of coupling and many may retain on-demand fixed price and delivery interfaces. 3.5 Benefits Partnering to quickly acquire knowledge and capacity assets and to dynamically integrate them into continuous processes that flow between partners will shorten time to cash. An NGM company will need the skills and flexible organization to enhance the ability to collaborate with multiple partners and most likely participate in multiple Extended Enterprises. Partnering to bring combinations of competencies together requires changed views of relations with other companies. Adaptive organization structures are necessary to facilitate changes in a business to accommodate dynamic factors from around the world that alter the addressed market. Particular attention needs to be focused on methods to fulfill the needs of all the stakeholders. Significant among them will be the ability to create, sustain, and amicably dissolve relationships with partners possessing diverse business practices and cultures. Also important will be the willingness to accept increased shared risk and reward to optimize potential return to all the stakeholders of the Extended Enterprise. 3.6 Additional Complexity Participation in Extended Enterprises brings with it a significant increase in operational complexity. Along with the usual coordination issues experienced with vertical integration inside a company, a whole host of additional issues are encountered and must be managed within the Extended Enterprise. Typical of these issues are the potential of vast cultural differences, business systems and accounting practices which are incompatible and have different approach/content/definition for the same common word (overhead), programmatic approaches to managing organizational production, global time zone differences, and sharing/protecting intangible resources such as reputation and intellectual capital. Inability to easily and quickly resolve these and other complex issues could impede the business cycle toward collaboration as a desired alternative to vertical integration. The long-term effect of that failure to this nations ability to compete on a global basis would be a disaster, particularly for small to medium businesses. Among the critical needs is the capability to simulate future results through a network of dynamically connected processes spread across a series of collaborative partners. To perfect the broad tool set of capabilities which can mitigate these complexity issues, an Extended Enterprise Laboratory is needed where industry, consortia, academia, and government can join together to create and pilot solutions.
4.0 ENABLERS Enablers for the various aspects of the Extended Enterprise are listed below. Successful NGM companies will continuously refine their implementation of strategies and plans that deploy these enablers. Collaborative Relationships To develop collaborative relationships the following methods must be mastered: Assessing commitment to Extended Enterprise principles Building trust rapidly and efficiently maintaining it Facilitating mutually beneficial teaming relationships at all levels and for all processes Focusing on long-term collaborative relationships Making decisions that are well understood with clearly defined responsibilities that are commensurate with authority to take action Methods to facilitate mutually beneficial teaming relationships at all levels and in all relevant processes between partners Methods to rapidly build and maintain trust. Core Competency Developing core competency will be an NGM companys window to collaboration. Methods to maximize return on their investment will be: Consistent strategic view so that management is focused on linkages within the Extended Enterprise Ability to anticipate core competence requirements Benchmarks to demonstrate pre-qualification Credible core competence identification, evaluation, and normalization to agreed standards for prequalification of partners Processes that identify how and when to maximize the use of the Extended Enterprises competencies. Customer Focus The Extended Enterprise must have a common Customer Focus. The following methods must be developed: Focusing on customer solutions to develop products which can be tailored, upgraded, and recycled Incorporating the customer as a stakeholder. Legal and Financial Facilitators The following legal, financial, and teaming facilitators must be developed and more widely deployed: Adaptable standards and group ware to facilitate collaboration across the Extended Enterprise Business policy which supports shared risk/reward and teaming Contracting and other legal practices which facilitate dynamic collaboration Flexible business agreements for the Extended Enterprise Laws and regulations which encourage Extended Enterprises Structures and methods which allow the Extended Enterprise composition to be dynamic without undue penalty to past, current, or future partners.
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Business Systems Business Systems for the Extended Enterprise require new and significantly different practices including but not limited to: Adaptive architectures for the Extended Enterprise Methods to establish shared vision, rewards, risks, metrics, and roles and responsibilities among partners and for the Extended Enterprise Robust change processes which can easily be transported across the Extended Enterprise Tools to develop capability and viability for new Extended Enterprise Ability to anticipate core competence requirements Robust innovation processes across the Extended Enterprise. The following sections discuss the enablers of Extended Enterprise Collaboration, as shown in Figure 4.0-1. Those enablers in solid outline are the basic subjects of this paper; those in dotted outline are treated in other NGM Imperative papers.
Core Competencies Customer Focus Business Systems
Legal & Financial Relationships
NGM Responsiveness Attributes for Extended Enterprise Collaboration

Customer Responsiveness Teaming as a Core Competency Global Market Responsiveness Responsive Practices & Culture Human Resource Responsiveness
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Management Vision
Communication Infrastructure
Figure 4.0-1. Key Enablers for Collaboration 4.1 Collaborative Relationships Collaborative relationships are the dynamic linkages that are the result of NGM companies working together for mutual benefit to bring a complementary set of competencies to address a market opportunity. Company strategic planners are increasingly sensing that it is highly advantageous to link their resources with complementary or supplementary resources from other companies. This creates a capability that no one company could as easily have created for itself. Collaboration is a preferred route for many, especially to meet the need to create new high value-added products for rapidly evolving markets. To succeed, these collaborative relationships must include interdependence and be mutually advantageous to all the cooperating companies. At times a company might collaborate with direct competitors to address a market opportunity.
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Classic hierarchical information and decision structures often take too long to access and utilize the right information and, in fact, often act on incorrect information and distort the result. For Extended Enterprise participants, internal teaming skills are a prerequisite and will be a demonstrable core competence for participation. An NGM companys capability to be a positive synergistic force in external teaming relationships will be the measure of success by which potential collaborators will judge that companys worth to join an Extended Enterprise. The skills to maintain relationships in multiple webs and supply chains across a variety of cultures will need to be fostered and rewarded. Compensation based on contribution value will become the norm for both individuals and companies. They will have the skill set to integrate business, technology, and relationships across the broad diversity of partners from around the globe. Benefits The advantages of developing the new capability via collaborative relationships versus vertical integration are considerable and include: Creation of a broader scale of capability Ability to provide a higher order product Elimination of redundant technology, process, and/or product development costs Increasing product breadth, and enhancing competitive position by offering new types of products or entering new markets, at lower development cost Significant reduction in the time to market Substantial savings in the capital investment required by sharing investments or perhaps even the elimination of a specific capital investment The ability to create a network of organizations, each of which contributes a limited function product or service capability, but in combination offer customers a higher value set of products and services Scalability for responding to changes in product volume or diversity.
Metrics Key metrics for collaborative relationships include: Commitment to collaboration and the rate of required organizational change Measurement and continuous reduction of the ratio of value-added work time to total process time Number of validated core competencies Percent of investments that significantly reduce cycle times Percent of people trained in Extended Enterprise skills Percent of revenue from Extended Enterprise participation Ratio of successful attempts to linking processes between partners Time to form an Extended Enterprise.
Barriers The following are current barriers to Extended Enterprise collaborative relationships: Collaboration is not the strategy of choice for some companies and cultures Collaborative business practice examples are not widely known Relationships change slowly. Enablers The enablers listed below help provide the necessary conditions for successful collaborative relationships: A decision-making methodology that is well understood with clearly defined responsibilities commensurate with authority to take action Methods for assessment of commitment to Extended Enterprise principles
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Methods to rapidly build teaming relationships and to maintain trust in practicing those relationships Methods to facilitate mutually beneficial teaming relationships at all levels The existence of pre-qualified partnering agreements The existence of mutually agreed upon Principles of Operation an explicit code of partnering ethics in which mutual trust and the sharing of proprietary resources are fundamental to successful collaboration. State of the Art/Best Practice Examples of the state-of-the-art in collaboration include: Agile Web, Inc., a group of smaller companies in Pennsylvania that are linking together in a collaborative relationship to leverage individual capabilities in providing services to the marketplace Arizona State University small business net PDES Inc., a virtual collaborative R&D consortia of competitors GM-Toyota Fremont car assembly system Film production industry. Emerging Thoughts Successful participation in collaborative Extended Enterprises requires new modes of operation to move from the traditional arms-length relationships characterized by formal processes; i.e., quote, bid, negotiate, contract, deliver to warehouse. This business style is usually focused on product both manufacturing and financial. The collaborative network of companies that forms an Extended Enterprise is usually energized by the need to link together a collection of core competencies to address a market opportunity. This grouping links together business processes whose combination will make more money and bring solutions to the customer faster than each could perform individually. With whom to form these relationships is not an easy decision. These decisions are becoming much more strategic and require more sophisticated analysis than typical make or buy decisions. Increasingly, companies will wish to have multiple relationships addressing multiple markets just as most people hold stock equity in more than one enterprise as an investment strategy. One-customer strategic relationships are risky. If, as is frequently the case, they are based only on cost, they are probably doomed in the next competitive environment. In order for ongoing decisions in cooperative projects to be timely and effective, they must be made at the operational level, consistent with team boundaries. Over time, the methods, processes, and systems used to transfer goods and services determine to a large degree the relationships of the companies involved. Collaborative relationships exist at many levels including: Buyer-Seller Partnerships Joint ventures Extended enterprises/virtual companies.
Methods to facilitate mutually beneficial teaming relationships between partners at all levels and processes are based on many factors and vary between organizations. The following are some factors that might lead to a decision to team: Aligned or complementary goals Changes in the marketplace Common threats Common evaluation methods Complementary business objectives Complementary systems
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Existing long-term interpersonal relationships Future potential opportunities Location and/or interoperability of systems Positive results of assessment Satisfactory history and track record. Desires of customers/stakeholders
As the world moves to a knowledge economy and other parts of the globe continue to raise the levels of education, nodes of knowledge will continue to appear as they have in the software industry. This trend will only complicate the already difficult task of quickly locating the set of core competencies/processes needed to complete an Extended Enterprise. Creation of knowledge supply webs can significantly assist in finding applicable knowledge and potential partners in the exploding total knowledge base. A variety of possible solutions have been proposed including a national/international Yellow Pages, a new class of brokers or trust agents, benchmarking standards for pre-qualification, a national/global network for customer/supplier partnering, etc. These are all attempts to resolve not only the visibility or advertising issue, but also issues of compatible business process interfaces and the need to very quickly build high-trust relationships. Figure 4.1-1 illustrates one of the key issues for successful collaboration. Valuing partners as equals through attaining a high degree of trust is necessary to operate an Extended Enterprise. Trust is usually earned in a relationship by commitment to performance over time. Methods are needed to reduce the time to trust by orders of magnitude. Pre-qualification, benchmarking, and trust agents are being used by many companies. Trust can also be achieved if the collaboration is structured so that all partners receive a high payoff by mutual success.
A High Performance to Promise
Partners as Valued Equals
A High Degree of Trust
Figure 4.1-1. Successful Collaboration 4.2 Core Competencies Core competencies tend to gather around skills, talents, or resources that are rare, valuable, and usually incorporate cross-functionality. They are difficult to emulate and usually have a significant influence on the capability of an organization. Management by core competence permits focused effort upon the crucial elements of a particular company to maximize potential value for collaboration. Many NGM companies may have only one core competency. Benefits Achieving levels of core competence improves a companys ability to offer an advantage in the marketplace. Metric A key metric is the time to identify and actuate sources of needed core competencies. Barriers Key barriers to core competencies are: Maintaining focus and resources on developing and/or sustaining vital cross-cutting core competencies in an Extended Enterprise is difficult when the competition for resources is vertically integrated silos inside individual partners The processes of identification, measurement, and assessment of level of excellence standards across an Extended Enterprise are not well understood. Enablers Key enablers are: A consistent managerial strategic view, focused on linkages within the Extended Enterprise Ability to anticipate core competence requirements
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Benchmarks to demonstrate pre-qualification Credible core competence identification, evaluation, and normalization to agreed standards for prequalification of partners Processes that identify how and when to maximize the use of the Extended Enterprises competencies. State of the Art/Best Practice Examples of state-of-the-art core competencies are: Chryslers product development organization Federal Express tracking and delivery processes Gateways order fulfillment process GEs business selection process Hondas engine capabilities Xeroxs document management platforms.
Emerging Thoughts Core competence identification and management, although a recent concept, has received much attention in the current practices of rightsizing organizations by focusing on processes, activities, and resources that add the most value to an organization. Recently, however, this process has evolved into a realistic joint assessment by Extended Enterprise participants to clarify those skills and talents within their respective organizations and among outside organizations to create true competitive advantage. Management has the responsibility to implement a strategic architecture that guides the development and acquisition of competencies. Historically this process has been used to reposition organizations, or the processes and product lines within an organization or company. This process begins with a strategy the combined ability of a group to see where it wants to go, assess where it is, and identify what must be done to close the gap must be consistent and persistent with a vision aligned to long-term business objectives. It is important to remember that this is a dynamic, on-going process. As companies go about the business of reengineering, business process simplification, and resultant downsizing, the ability to sustain core-competencies and to retain sufficient resources must be stressed. There are both tangible and intangible aspects that must be considered as an organization builds its capabilities. Supporting organizations and functions tend to be overlooked and are part of the intangible that are necessary to support a given core competency. Many organizations are learning sometimes the hard way that the building blocks of corporate strategy are not just products and markets, but business processes. Competitive success, in turn, depends on transforming a companys key processes into strategic capabilities that consistently provide superior value to a customer. These capabilities may or may not be core competencies; the challenge is to make the correct strategic investments to support transitions from traditional business to a new organizational framework for NGM. The changes necessarily cross functional responsibilities and, therefore, the champion of a capability-based strategy must be the CEO or equivalent. 4.3 Customer Focus Customer focus is a process used to focus on customer solutions and products which may be tailored, upgraded, and recycled. It is the methods used to more effectively involve the customer as a stakeholder. If a company is not making money, the rest doesnt matter. This is a quote from a large American manufacturer with immense multinational ties. Coupled with that should follow a corollary that if one does not have a satisfied customer, one will not be making money very long.
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Metrics True customer focus is only achieved as a result of a superior product delivery system that meets or exceeds customer requirements. Barriers A key barrier is the failure to include customers early enough in the product development cycle. Enablers The following are key enablers: The products of a customer/supplier are conscientiously built and have zero defects, thus delivering errorfree products while achieving and improving quality and safety throughout the producing organization A customer/supplier is a market leader in product delivery cycle A customer/supplier has effective relationships with its entire value web that establishes a work climate to achieve superior results through collaborative work A customer/supplier is always identifying and reacting to opportunities for learning, improving, and innovating, and for applying new ideas that positively affect cost, system performance, product, processes, and interfaces A customer/supplier profits from its network-wide cooperation and strategic vision. Emerging Thoughts With increasing international trends of both the lessening of trading boundaries and the increasing access to knowledge, goods, and services, the successful company must become more anticipatory and adaptive to market stimuli. Customers are demanding wider arrays of customized products with shorter lead times. Rapid change in the global market place is inevitable. The supplier web must figure out enabling methods to focus on gaining and maintaining customers and integrating those methods into core competencies no matter where the company fits into the life-cycle supply chain or envisioned value webs. The number and types of members may be in continuous flux depending upon the needs of the value web at a particular time. Most companies exist as both a supplier with customers as well as a customer for other suppliers. Customer-supplier satisfaction is the extent to which the customer and the supply chain members are satisfied with and value each others capabilities, interactions, and results, and the mutual benefits of the relationship. Early in a relationship, satisfaction is heavily based on meeting obligations; this is the baseline for competition. As the relationship develops, satisfaction becomes based on added value (both tangible and intangible) and reflects growing interdependence, trust, and respect. Potential stakeholders will want to partner with companies they consider to be world-class and can demonstrate a capability for dynamic partnering with pre-qualified, certified partners. Seamless information flows among all functions internally as well as externally must be attainable. Common costing methods must be in place as well as refined accountability processes that enable commensurate shared risk and reward. The successful Extended Enterprise will have processes in place to anticipate consumer needs and market trends and will be able to delight its customers with unique or unexpected benefits. 4.4 Legal and Financial Facilitators 4.4.1 Legal Relationship Facilitators Facilitators are contractual and other legal practices which promote dynamic collaboration and encourage the formation and sustainment of Extended Enterprises. Many manufacturing change agents view historical financial and legal systems and practices along with the related laws and regulations as the most serious inhibitors to successful transformation to the NGM Extended Enterprise scenario. The success of the future of U.S. manufacturing during the next ten to fifteen years will
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be highly dependent on the changes which occur to these support systems. Both the legal and financial professions are trained to operate from precedent and quite often act as the historians for the businesses they serve. Compounding the problem is that U.S. law and regulatory creation and implementation process prevents rapid change. An example of that process is the failure to put in place the Teamwork for Employees and Management (TEAM) bill. Therefore, if an owner of a business needs to use cross-functional teams it only happens by permission of organized labor as ruled by the National Labor Relations Boards (NLRB) interpretations of current law. Similarly, collaboration, risk, and reward sharing, and a number of other Extended Enterprise features are inhibited by a variety of laws, regulations, and practices. In some cases they do not prevent but drive companies away from informal trust relationships and into complicated legal entities. One of the points in the 1991 draft of Industrial Bill of Rights (Joseph Martino) was this item: Government shall make no law which abridges the right of a manager or owners to collaborate in the development of new technologies or new products. That issue remains to be addressed. Enablers Key enablers for successful legal relationship facilitators are: Adaptable standards and groupware to facilitate collaboration across the Extended Enterprise Contracting and other legal practices which facilitate dynamic collaboration Laws and regulations which encourage Extended Enterprises Methods to rapidly build and maintain trust Clearly enunciated dispute resolution processes focused to preserve relationships among the partners of an Extended Enterprise Pre-established understanding regarding membership and rights of use of intangible; e.g., intellectual property either brought by a partner to the Extended Enterprise or developed in the context of the Extended Enterprise itself Advancement of state, national, and international laws, treaties, or regulations to increasingly recognize the global nature of competition and the dynamic nature of business relationships. Emerging Thoughts Extended Enterprise collaboration, particularly in web or matrix configurations, requires a new perspective for customer-supplier legal frameworks. The current legal system allows for dynamic partnering, but large customers such as governments need to change acquisition habits to take advantage of them. In such a partnership there may not be a single prime contractor. Successful operation of dynamic partnering will need new kinds of legal underpinnings such as a law that encourages rather than inhibits teaming, or forbids collaborative sharing of profits. There is a need for vehicles that permit rapid creation, change in composition, and dissolution of the Extended Enterprise. There is usually a need for creation of a legal entity to have fiduciary responsibility and resolve the joint and separate liability responsibility. Perhaps limited liability companies can be tailored to offer a variety of solutions while maintaining the appropriate mix of corporate and partnership attributes. Additionally, sharing of revenue based upon contribution value, data rights, compensation for excess capacity maintained for the good of the Extended Enterprise, and many other new aspects of customer-supplier agreements have not been common in the past. This class of issues can and should be resolved prior to entry into the relationship. These pre-nuptial agreements need to be explored and experiments conducted. Ways to constructively and expeditiously resolve controversy and avoid litigation both among partners in an Extended Enterprise and with third parties need to be in place so that partners can act in good faith and remain whole during and after participation in an Extended Enterprise. Competitive Technologies, Inc. has created a handbook and guide of model methods and examples which companies can use to guide themselves through the establishment of NGM-style relationships with potential partners.
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4.4.2 Financial Relationship Facilitators Financial facilitators are those new or emerging practices which encourage the formation and operation of Extended Enterprises. Historic financial systems and accounting practices were based upon high physical labor content, capitalization utilization that was roughly the same for each product unit, and capital investments that had an extended value, i.e., machines often lasted as long as buildings. Those assumptions, valid at inception, no longer accurately reflect the reality of most manufacturing businesses. Barriers Key barriers are: The continued imposition of archaic practices in modern NGM companies drive many investment and operating decisions in directions which do not necessarily yield maximum profit The systems in place typically can identify costs for alternative actions in a decision matrix (but with the caveat that overhead pools are usually distorted). Enablers Key enablers are: Business policy which supports shared risk/reward and teaming Flexible business agreements for the Extended Enterprise Financial incentives to facilitate mutually beneficial teaming relationships at all levels and in all relevant processes between partners Structures and methods which allow the Extended Enterprise composition to be dynamic without undue penalty to past, current, or future partners. Emerging Thoughts To maximize return or profit, systems and practices are needed which can support decisions such as: Determining the value to the company of the delivery advantage of reducing one unit of time, i.e., minute, hour, day, month, year. Assuming a fixed end of market date for a product, what is the value of reducing the time to cash return by one unit of time? Determining the net return to the business of one (1) point of market share. Providing a financial value for non-tangible but real assets such as knowledge and organization strength. New methods are being introduced to help answer these kinds of questions. DARPAs Agile Manufacturing Program (AMP) issued business practices contracts for Activity-Based Costing for Agile Manufacturing Control with Industrial Technology Institute and Metrics for the Agile Virtual Enterprise with Sirius-Beta. The Automation and Robotics Research Institute (ARRI) is developing a total tool set for performance measurement/metrics methodology and investment management multi-attribute decision analysis. This work by ARRI builds on similar work done for the National Center for Manufacturing Sciences (NCMS) and the Air Force Enterprise Analysis. Additional new methods are under investigation and are described in Cooperate to Compete: Building Agile Business Relationships by Preiss, Goldman, and Nagel. Target costing and time-based costing are among methods being tried. Time-based costing may hold the greatest promise to facilitate Extended Enterprises, but many trials and hurdles remain before it will become a generally accepted practice. All partners in an Extended Enterprise will need to have not only the same general method but will also need to use equivalent assumptions so that cost and price structures and equitable profit distribution can be made among the partners.
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Leading economists have now identified the difference between book and market value may be 90 percent due to the intangible assets of a company (i.e.; the non-financial data) not reported on the balance sheet. Companies are measuring only what history and the tax system demand, which may only be some of the indicators of success. This more modern view of performance has captured the imagination of The Canadian Institute for Public Accountants, The World Bank, The Brookings Institute, the Securities and Exchange Commission (SEC), and the Organization for Economic Cooperation Development (OECD). The practice is new and should be developed to support NGM. Creative financing for manufacturing investment needs to be instituted, including partnering with other companies, leveraging government R&D programs, seeking new ways of acquiring capital, and valuing flexibility/reusability to shorten response time to changing customer needs. Methods to value human talent and other intangible assets remain a mystery. In startup companies, knowledge is usually all that the requester brings to potential investors. As companies mature, that asset is relegated to unimportance, and tangible things become the only collateral assets: machines, buildings, land, inventory, etc. In many companies the real assets necessary to sustain the business are the knowledge base and the people capable of exploiting it to create profit. Sometimes one or both are irreplaceable. There are some emerging thoughts concerning how to assess the potential intangible assets of a company. Calculated Intangible Value (CIV) from NCI Research is one example. However, until some assessment process is rigorous enough to stand as collateral, virtual companies and Extended Enterprises will have a difficult time dealing with equity markets. Traditional metrics have made it difficult to link short-term goals with long-term strategy. Manufacturing technological investments have been usually justified financially to meet tactical goals without being able to consider long-term flexibility/reusability. Standard measures of performance need to be augmented with a few new yardsticks. New accounting metrics are being developed that bring a broader perspective to investment decisions, reflect true environmental costs, show true costs, and show how time reductions can improve sales and profits. These techniques will assist in justifying investments in flexibility and reusability. These systems will assist in the quantification of intellectual and information assets by using metrics that measure the effectiveness of information in improving manufacturing processes. New systems and methods will provide financial and operational integration. (Operational data is assembled in such a way that the economic realities of capacity decisions are seen as a closed loop.) All costs of a process are assigned and, if an improvement is seen, the model will understand the source and what type of capacity was effected. Focus on total time, on non-productive activities, and on dynamic response of the system will sharpen with the use of these new tools. Considerable discussion surrounding these and other related enablers can be found in Cooperate to Compete. 4.6 Business Systems Business systems and practices facilitate and support dynamic collaborative relationships. They are the means by which organizations manage processes that create value for the customer. Metrics Key metrics for business systems include: The percentage of the right information at the right place at the right time The total cost of common business systems. Barriers Key barriers are: Affordability of tools is a significant challenge for some small- and medium-sized manufacturing businesses Alignment of Extended Enterprise goals and investments varies between companies All members of the Extended Enterprise are not aligned to the same vision
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An agreed-upon process or modeling capability for maximizing all core competencies of the Extended Enterprise does not exist Consensus and standardization of advanced Extended Enterprise tools does not exist Cooperation and trust are not developed to a point where open, effective communication is possible Current business systems and practices inhibit or are counter-productive to companies desiring collaboration Definable and quantifiable metrics for success are either not available or are not universally accepted Development of new standards is lagging behind the desire to implement Financial institutions near-term return on investment requirements is in constant tension with longterm growth goals Members do not have common understanding of metrics or a mutual commitment to long-term growth U.S. industry is not broadly and actively involved in international standards initiatives to the degree that competitor nations are. Enablers Key enablers for successful business systems in Extended Enterprise are: Methods that allow the Extended Enterprise composition to be dynamic without undue penalty to past, current, or future partners. These methods must be derived from policies, practices, and procedures to link all sizes of manufacturing organizations to value webs. Previous industry work such as the Strategic Supply-Chain Management Axioms (CAMI) (see Appendix A) provide a foundation for understanding the challenges to cooperation between Extended Enterprise partners. Advanced business practice needs include strategic supply chain management, activity-based accounting, target costing, time-based costing, adoption of standards, defining technical affordability, rule-based management, life-cycle management, innovation management, knowledge-based management, and flexible management processes. When a companys processes and systems are dynamically linked with partners, the combined performance will depend upon the interaction of the linked processes across the Extended Enterprise, not just the independent capability of each process as it was in the old stand-alone mode. Systems will be needed to link all business processes, not just design or scheduling. This additional level of complexity will require a significant increase in human talent to facilitate team relationships between partners and interoperability of a broad range of business systems. Of particular value will be a capability to simulate and model all the partners linked processes to maximize response to change (demand, etc.) and to optimize use of partners processes while maximizing return to the Extended Enterprise. Adaptive architectures and business agreements are required for the Extended Enterprise. Adaptive architectures and business agreements are fundamental to rapidly reconfigure the Extended Enterprise partners, responsiveness to fluctuations in market demand and new product features and attributes, and investment for common competitive goals of the NGM company and Extended Enterprise. Adaptive architectures allow for rapid reconfiguration of the Extended Enterprise by the addition of different preferred organizations within the web. Business agreements can be applied to all members of the web or can be specific between certain members of the web. Understandings of abilities, requirements, and metrics are essential. Current standard measures of performance and practices of accounting are no longer adequate. Methods to establish shared vision, rewards, risks, metrics, and roles and responsibilities among partners and for the Extended Enterprise. The holistic purpose is to align all Extended Enterprise knowledge, resources, skills, and other assets for maximum leverage to achieve and maintain a competitive state. Without the alignment of vision, re-
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wards, risks, metrics, etc., throughout the strategic, operational, and process levels, no organization or Extended Enterprise can achieve its vision. Use of a balanced scorecard (per Kaplan and Norton) concept introduces new management processes that contribute to linking long-term strategic objectives with short-term actions: 1. Translating the vision helps managers build a consensus around the organizations vision and strategy 2. Linking of tactical and strategic objectives and broadly communicating these objectives drive permits managers to drive a particular strategy throughout the organization and link that strategy to departmental and individual objectives 3. Business planning enables companies to integrate business and financial plans 4. Feedback and learning gives companies the capacity for strategic learning which consists of gathering feedback, testing the hypotheses on which the strategy was based, and making the necessary adjustments. The balanced scorecard approach is one possible technique for optimizing operation of the Extended Enterprise. Kaplan and Norton have published case studies on using the balanced scorecard approach. They have worked with Electronic Circuits, Inc. (ECI), an electronics contract manufacturer, and Rockwater, a subsidiary of Brown, Root, and Halliburton. Texas Instruments, Hewlett Packard, Milliken, Apple Computer, and Advanced Micro Devices (AMD) have also piloted use of the balanced scorecard approach with great success. The process of understanding ones business and establishment of appropriate performance measures and metrics has proven to be as important as the actual metric values themselves. Recent industrial history has established the fundamental set of principles for which there must be common understanding within successful manufacturing endeavors. To deploy this expanded set of principles within an Extended Enterprise will require focus on critical understanding of each individual strategic core competence within the Extended Enterprise and visionary management to exploit the possibilities. New secure but transparent communications linkages are needed throughout the Extended Enterprise infrastructure in combination with robust means to secure intellectual property. Many consumer industries textiles/apparel, food, automotive, commercial electronics, etc. regularly use electronic commerce networks to interface directly with customers to perform order, sales, purchasing, distribution, tracking, and financial transactions. These industries are usually leaders in cycle-time reductions and responding to changes in the marketplace. Management at all levels must provide the leadership within the customer/supplier web to maximize the competitive contribution of preferred supplier partners. In tomorrows competitive environment, not only will companies compete with other companies, but also supply value webs will compete with other supply value webs. Economic reality suggests that suppliers provide a significant percentage of the end product and therefore represent a major percentage of competitiveness in time-to-market, quality, and cost. Members of the Extended Enterprise should also understand that each NGM company can compete with and/or partner with other organizations within and without the Extended Enterprise. Tools to develop capability and viability for new Extended Enterprise. As customers desires become more sophisticated, products and processes become a platform for interactions that permit inclusion of customers as active participating stakeholders. As this interaction grows to provide solutions, the need for real change in all business systems becomes imperative. As direct linkages are built between partners, the first barriers are the need for flexible operating process standards and interoperability. Another crucial concern is that the systems will no longer be insular but linked together dynamically, just like the product/process flow will be linked together without warehousing buffers. The demand for seamless open systems will be a paramount requirement for Extended Enterprise success. As these business system interfaces move from static to dynamic, the changes required probably cannot be extrapolated from current system capabilities. Juggling those multiple loyalties, safeguarding various
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partners intellectual knowledge, and being responsive to all will continue to be a growing challenge as processes are dynamically linked with a variety of collaborating partners. State of the Art/Best Practice The concepts of Extended Enterprise collaboration are currently being put in place by leading practitioners. They are developing tools and systems that utilize information technology to enable a more rapid adoption of advanced business practices and processes. The Agility Forum is actively pursuing new approaches to performance measurement with its Agile Virtual Enterprise (AVE) Enterprise Development Group (EDGe). The approach, however, is primarily focused on measuring Agility in a virtual and distributed enterprise, not on company-level organizational enterprise performance measurement and management. Considerable research is being conducted in developing new metrics used to measure Agility. Enterprise metrics, performance metrics, capitalization, and partner qualification are some of the AVE framework elements being explored. The Agility Forum is also developing an enterprise performance assessment tool to be used at the strategic level of a company to help it determine where it is with respect to state-of-the-art industry leaders and help to determine what actions it needs to take to become more agile. A considerable number of management consulting companies, as well as manufacturing companies themselves, have developed quality functional deployment tools and formal benchmarking protocols to help ascertain the actions a company should take to become more globally competitive. An Agility study was conducted by the Agility Forum in 1994 to identify core parameters of an agile manufacturing enterprise and their impact on cycle time, quality, and cost; the results were published in January 1995 by the Agility Forum as Agility Initial Survey Results of a Pilot Study (AR95-01). Advanced customer-supplier webs, established common qualifications for all businesses, and accepted performance measurements of success are among the fundamental tools which need to be expanded. Concepts of target costing, time costing, Extended Enterprise concurrent concept development, rapid communications, and scheduling of resources and assets represent requirements for systems and practices which need development, piloting, and deployment. The tools for developing enhanced capabilities and competitive viability of the Extended Enterprise must be proven in industry. Nothing speaks for successful tools and practices as much as competitive success. Because the tool kit for success is constantly changing, the tools of the Extended Enterprise must be flexible and responsive to these inevitable changes. Industries will grow as Extended Enterprise tools become more efficient, effective, and globally competitive. Emerging Thoughts An industrial consensus of pre-qualification metrics for partners within the Extended Enterprise will contribute significantly to a more rapid selection of supply partners. Effective and accepted means of measuring competitive effectiveness of an Extended Enterprise are necessary. Adaptive architectures require accepted standards of communication and knowledge transfer (industry-led) and the creation of a supporting national infrastructure administered in a neutral manner (government/industry led). Government and national regulatory boards must undertake reinvestigation of regulations on financial accounting, collaborative industrial research, and other inhibitors to an industrial agenda for national economic growth in manufacturing. Benchmarking nations worldwide would be a first step to establish an agenda for change. There is need to develop a universally available database a national data repository for identifying and categorizing manufacturing industrial resources, assets, and competence for large, medium, and small companies and support organizations to facilitate rapid creation of Extended Enterprises. Universities must take a more proactive approach to understand the principles of the Extended Enterprise and emerging practices and weave them into the curricula of knowledge supply webs.
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Wide-scale institution of these advanced methods will require a powerful coalition between U.S. industry, the federal government, financial institutions, and academia. Industry must lead the effort through awareness of competitive advantage. The government must ally with industry for national growth and leadership. Financial institutions must assure long-term investment support. Academia must provide research relevant to manufacturing needs. Extended Enterprise Laboratory The rapid development of the Extended Enterprise as the normal way of doing business gives rise to a whole new set of issues. These involve the human, business process, and technical interface areas and their integration. Some of the major interesting problems include: Knowledge sharing and protection of intellectual property in situations where the members of any Extended Enterprise may currently or soon be teaming with competitors. (Example: open systems coupled with object modeling may provide some solutions.) Creating interfaces between firms which are supportive of lean operations by not adding overhead at the interfaces and by eliminating duplicate functions. (Example: development and testing standard agreements for rapid partnering.) Creating a matched dynamic response of the firms which comprise the Extended Enterprise to meet changes in product quantity and schedules and in innovating new products. Selecting and controlling core competencies of the enterprise without owning core competencies. Incentives which reward risk taking and knowledge contribution of team members in proportion to their efforts. Tradeoff methods for balancing the advantages of long-term commitment versus short-term teaming to achieve specific needs for competencies. Rapidly achieving and maintaining technical interfaces and process compatibility to achieve the most effective operation. (This could include demonstrations of certified networks.) Effectively using brokering services for match-ups of capabilities and achieving equitable agreements on rewards, functions, common processes, and intellectual properties. Developing, validating, and deploying metrics which span the teamed elements of the Extended Enterprise. Developing, validating, and deploying metrics, communication protocols, and scorecards which satisfy the needs of all stakeholders in the Extended Enterprise Developing assessment models for effectiveness of various combinations of companies for a given Extended Enterprise. To address such issues, demonstrate exportable solutions, and maintain a cohesive, state-of-the-art picture, it is recommended that an Extended Enterprise laboratory be established with support from industry and government. This laboratory will develop an Extended Enterprise model which describes critical processes in dealing with the issues noted above. Additionally, the laboratory will develop innovative proposals for new approaches to deal with these issues and will demonstrate and measure performance of these approaches in an enterprise context. It is expected that the Extended Enterprise laboratory will be a virtual organization to include several organizations working on key issues. These organizations will themselves act as an Extended Enterprise to demonstrate key interface functions. The need for the Extended Enterprise laboratory results from the need for cooperative development and agreement on solutions to inter-enterprise operations. Whereas any large firm may develop and impose conventions on its suppliers, teams of firms need a neutral forum specifically to avoid placing undue burdens on suppliers which must serve many masters. Additionally, cooperative development will save the overhead of many duplicate developments which have similar purposes.
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The laboratory should be hosted by an extension or research organization; anticipated membership of the Extended Enterprise Laboratory could include well-known corporations, industry associations, and research and deployment organizations. 4.7 Other Enablers Addressed in NGM Imperative Papers The following sections provide a brief discussion of how these other enablers affect Extended Enterprise collaboration and provide a reference to the principle imperative papers which are a resource for the subject. Knowledge Generation and Learning Effective implementation of change and innovation requires constant expansion of knowledge usable by the Extended Enterprise. An Extended Enterprise which has eliminated boundaries for shared learning can readily evaluate and implement new ideas and can create a competitive advantage. To stay ahead of the competition, or simply to survive, an Extended Enterprise must learn, generate new ideas, and transform those ideas into innovations and meaningful process and product adaptations. The more a customer teaches a company about preferences and needs, the better the company can provide exactly what the customer wants, exactly the way they want it. Learning from the customer is a way to ensure a competitive edge. As customers within the Extended Enterprise are involved as stakeholders in the enterprises efforts, customers can also learn from suppliers about new techniques, approaches, or products that may meet needs the customers have not yet articulated. With profitability of the Extended Enterprise as the goal, any time customers and suppliers in the enterprise can improve performance through mutual learning, the Extended Enterprise wins. Opportunities for learning and effective implementation are significantly enhanced by both cross-functional and crossorganizational teams. They provide a forum for the development and exchange of ideas and for improvements and innovations that reflect the thoughts, capabilities, and requirements of multiple stakeholders. New skills and career paths are expected to become necessary, such as relationship facilitators to guide, facilitate, and create trust within crossfunctional teams between partners with varied cultures. The Knowledge Chain Web and Workforce NGM papers will further develop these needs. Management Vision Management must establish the vision for their business and institute metrics and reward systems throughout the strategic, operational, and process levels of the business. Active continuous re-enforcement of the vision throughout the business by the CEO and management team is necessary to keep it alive. Included will be active support for risk taking and commensurate rewards. It is a necessary component of applying new learning or implementing change and innovation. Trust and the corresponding responsibility delegation is a critical factor in risk taking. Trust is also a crucial component of an atmosphere that is conducive to the development and sharing of new or different thoughts, ideas, or insights. The Extended Enterprise may be widely dispersed geographically. Therefore, adaptable standards and proprietary intellectual base groupware are needed to facilitate collaboration across the Extended Enterprise. Group ware and other methods of communication that support long distance group learning and decision making will increase the rate of mutual learning and adoption of new ideas and augment face-to-face learning. Adaptable standards that apply throughout the system will significantly ease the implementation of innovations through minimizing the unnecessary disruption they can cause. The more open, accessible, and affordable the information infrastructure is, the greater the likelihood that individuals within the Extended Enterprise will share information and learn from each other. Effective data, information, and knowledge-sharing technology that provides protection of each partners intellectual knowledge and that of the Extended Enterprise must be developed. This subject is more fully addressed in the NGM Imperative papers on Enterprise Integration and on Adaptive, Responsive Information Systems. Change and Innovation Management The two most pervasive forces influencing the future manufacturing business are that change is irresistible and that the geometric explosion of technology will continue. Success in the future demands that businesses implement and aggressively nurture innovation and change processes. These are two key business processes in
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which the Extended Enterprise partners, in dynamic collaboration, must be very skilled. In addition to having the capabilities to invoke both change and innovation, there must be in place the methods to anticipate and recognize an approaching change of customer needs and market, environment, and technology domains. After recognizing the need, management must have the volition to act and follow through. Aversion to individual and shared risk must be tempered and overcome to maximize potential value as an Extended Enterprise partner. All three components capability, recognition, and volition will be needed to successfully keep the Extended Enterprise viable; i.e., continue to make money. The Change Process and Innovation Process NGM papers address these subjects. Communications Infrastructure An accessible and affordable communications structure needs to be available to all businesses, large and small, so that the full potential of dynamically linked business processes can be fulfilled. Without this supporting infrastructure, knowledge transfer among Extended Enterprise partners will not be efficient and sustainable. The Enterprise Integration Imperative paper addresses this issue. Dynamically Linked Business Processes As Extended Enterprises dynamically link their business processes it will be necessary to simulate their interactions to be responsive to customers changing desires. New timelines, features, designs, materials, delivery points, etc. will need to be assessed dynamically across the linked systems of the partners. Simulation packages need to be developed which provide answers to the Extended Enterprise decision process. The NGM Imperative paper addressing this issue is Pervasive Modeling & Simulation.
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5.0 ACTION RECOMMENDATIONS Table 5.0-1 identifies actions that industry, government, academia, and individuals can take to support development, validation and implementation of Extended Enterprise Collaboration techniques to support evolution of NGM Enterprises. Table 5.0-1. Summary Action Framework
Sector Industry Groups Near-Term Pilot & establish value of time measurements Tradeoff method between collaborate or vertically integrate Pilot flexible collaboration agreements Establish a cooperative Extended Enterprise laboratory Create model for shared risk/ reward acceptable to equity market Support technology for dramatically increased bandwidth, secure, communication system that is accessible & affordable to all companies Mid-Term Far-Term Develop competency bro National core competency kerage data system library data system & clearing house Product content is totally Develop accounting stanreusable dards to value intellectual & intangible assets Pilot time-based costing
Government Groups
Modify law & regulation to facilitate teaming & collaboration tax, labor, anti-trust, etc.
Academic Groups
Individuals
Develop risk/reward analyses for Develop methodology to establish shared vision, metcollaboration rics of success, roles for part Develop trust relationship manners, etc. ager curricula Create tools to assess viability of Business decision simulation across dynamically linked new Extended Enterprise processes between partners Develop trust brokers Learn global teaming skills
All branches become true partners with industry to maximize U.S. economic leverage The industrial bill of rights is realized Apply chaos theory to the formation of optimum compositions of Extended Enterprises
Every person is on a continuous learning vector
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APPENDIX A STRATEGIC SUPPLY CHAIN MANAGEMENT AXIOMS Below are the Axioms of the Optimized Supply Chain developed within the CAM-I Strategic SupplyChain Management (SSCM) Program and the DARPA Qualification Criteria for Agile Enterprises (QCAE) Project. (Copyright: Doyle, Parker, Zampino, & Boykin) 1. There is a shared specific focus on satisfying the common end-consumer. 2. There is an alignment of vision. 3. There is a fundamental level of cooperation and performance to commitment (trust). 4. There are open and effective communications. 5. Decisions are made by maximizing the use of the competencies and knowledge within the supply chain. 6. All stakeholders are committed to generate long-term mutual benefits. 7. There is a common view of how success is measured. 8. All members are committed to continuous improvement and breakthrough advancements. 9. Whatever competitive pressures exist in the environment are allowed to exist within the Extended Enterprise.
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APPENDIX B GLOSSARY Activity-Based Costing (ABC) A cost accounting system that accumulates cost based on activities performed, and then uses cost drivers to allocate these costs to products and other bases, such as customers, markets, projects. ABC is an attempt to allocate overhead costs on a more realistic basis than direct labor or machine hours. Agile Web A network of small businesses in northeastern Pennsylvania that has agreed to pre-qualify its members so that they can combine their selective core competencies to serve clients whose needs exceed the capabilities of any one of them. Agility For a company, Agility is the ability to thrive and prosper in a competitive environment of continuous unanticipated change and conflicting requirements to respond to rapidly changing markets driven by customerbased valuing of products and services. For an individual, Agility is the ability to contribute to the bottom line of a company that is constantly reorganizing its human and technological resources in response to unpredictable and changing customer opportunities. Company An association of persons, their capital, and their physical assets, such as buildings and equipment, that exists for the purpose of carrying on a commercial or industrial undertaking. Each business in the supplier network chain may be considered an enterprise. Concurrent Operations The process of organizing the core competencies of the enterprise in a manner that reduces the product realization time. Concurrence is a key to reducing nonconformance to requirements, thereby reducing cost. Also, Concurrent Operations is a characteristic of Collaborative Operations. Consortium For Advanced Manufacturing International (CAM-I) An international, not-for-profit consortium founded in 1972. Membership includes over 50 Fortune 200 companies who are recognized leaders in manufacturing. The CAM-I charter includes conducting precompetitive, industrially based, industrial-driven applied research and development of advanced manufacturing and management systems, enabling technologies, and standards. Core Competencies The basic technologies, skills, and knowledge possessed and required by a company to excel in its business. A manufacturer of small power transformers may have core competencies such as transformer design, computeraided design and manufacturing, and electrical insulation technology. Customer-Perceived Value-Pricing Strategy The pricing of products and services according to their value as perceived by the customer. Empowered People Teams and team members having the responsibility and commensurate authority to reconfigure the enterprise processes and products so that the enterprise can respond promptly to customers unanticipated demands and needs.
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Enterprise An enterprise is defined as a company or organization. The Extended Enterprise is a teaming of enterprises (see Extended Enterprise). Enterprise Integration The process of combining the diverse corporate and social cultures brought on by global partnerships, including the safeguarding of intellectual assets, remuneration based on the value added by each participating organization, local work practices, social customs, liability sharing, and team-based cooperation for the overall benefit of the enterprise. This includes seamless interoperability of systems and sharing of information, but is not limited to same. Enterprise Management A generic business process that focuses on managing the business with the objective of making a profit by meeting customer requirements, while concurrently addressing other issues not directly related to meeting customers requirements, such as satisfying legal and environmental issues. Extended Enterprise All stakeholders, such as employees, suppliers, and customers, who perform the valueadded processes required to develop and deliver products to a customer. The organization consisting of the customer, prime supplier of a product to the customer (distributor), prime manufacturer (final assembly and/or system component integration), and the multi-tiers of suppliers that provide product or services to the raw material level. Extended Enterprise Partnering The ability of an organization to form and dissolve partnerships rapidly. Factors that enable Virtual Organization Capability include candor and honesty in business-sensitive areas, such as intellectual property rights issues and the treatment of software licensing; motivated, empowered, and loyal workforce; willingness to share vital information; routine multi-functional team projects and intra-company partnering; adherence to industry standards; and managerial integrity. Financial Accounting Standards Board (FASB) A standard-setting and financial accounting research organization consisting of seven full-time professional members drawn from accounting, business, government, and academia. The members are required to sever all connections with their organizations prior to assuming membership on the board and are appointed for five-year terms. Flexible Manufacturing The ability to manufacture a wide variety of hardware types (products) in a cost-effective and timely manner and the ability to adapt to the changing needs of the organization (customer). Flexible solutions emphasize highly skilled personnel as well as flexible equipment, facility layout, and manufacturing process optimized for the business environment. Flexibly Reconfigurable Organizational Structures Organizational structures, such as internal or external partnering relationships, teams, and business processes that are easily restructured to meet new opportunities or customer requirements without severe negative impact on the organization as a whole. Generally Accepted Accounting Principles (GAAP) Standards intended to help accountants apply consistent principles for different businesses. GAAPs are recognized by the profession as representing the generally accepted position of the profession and must be followed when preparing financial statements unless circumstances warrant an exception, in which case, an auditors report must clearly disclose the nature of and reason for the exception.
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Global Sourcing The procurement of goods and services from anywhere in the world. Information-Centered Organization An organization which recognizes that the information it possesses is a key discriminator of an agile organization and uses this information to sell upgradable solutions rather than physical products in a one-time transaction. Information-Rich Products And Services Products and services whose value is contained in the skills and information that they represent. Informationrich products include engineering tools and computer software. Integrated Comprehensive Enterprise Processes A relationship between all elements of the supply chain or web, including partners, in which the processes, procedures, and communications between the elements are so integrated that the differences between the elements are not apparent. Integration The ability to link heterogeneous processes and equipment across companies and among collaborating companies (suppliers, partners, customers). It is particularly important in the area of communication and information exchange. Intellectual Properties Property rights such as patents, trademarks, copyrights, and designs. Inter-Enterprise Team A team comprised of persons representing various organizations from different companies working together for the purpose of accomplishing a specific business objective. Internal Customer The persons, groups, departments, or organizations within a company or firm that define the process used to deliver goods or services to the external customer. In a linear process, the internal customer is usually the next person or group in the assembly line. Interoperability The ability of computers on a network to fully share application software. A close, collaborative relationship between two or more organizations within a company for the purpose of delivering a product(s) or service(s) to a customer. Knowledge-Based Products Physical products or information that represent upgradable solutions to a customers needs. Knowledge-Driven Enterprise A company that uses its primary core competency, which is the information it possesses (including the skills, knowledge, and expertise of the total workforce), to provide individualized products and services for its customers. Lean Manufacturing A set of practices intended to remove all waste from a manufacturing system. Lean encompasses Just-InTime, Kaizen, Kanban, Empowered Teams, Cycle Time Reduction, Small Lot Manufacturing, and Flexible Manufacturing.
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Life-Cycle Design Methodology A design methodology in which the companys products are designed to evolve with changing customer demands and market forces. In Life Cycle Design Methodology, the design of products, processes, and services supports their evolution through reconfiguration and upgrade. Mass Customization The manufacture of large volumes of products that are customized for individual consumers. In an agile environment, the manufacturing cost of mass-customized items is a smaller fraction of the total cost than for mass-produced products. Mass Production A production environment in which large quantities of units are produced and placed in inventory for future sale. In mass-production environments, production cost is a significant portion of the selling price, and manufacturing technology, such as advanced machine techniques, is a key discriminator between producers. Mastering Change And Uncertainty The process by which companies quickly and easily reconfigure their organizations and production operations to respond rapidly to changing customer demands and market conditions. Metrics A class of measurements that enables one to assess the performance of a system, an organization, an individual, or a machine. For example, the metric quality is a class that includes measurements such as scrap rate, warranty cost, and delivery time. Next-Generation Manufacturing (NGM) A 15-month development project whose objectives are to develop a broadly accepted, industry-driven model for a next-generation manufacturing enterprise and action plans that individual companies can use to help plan, achieve, and sustain world-class manufacturing. NGM is supported by the National Science Foundation, Department of Defense, Department of Energy, National Institute of Science and Technology, and many industry sponsors and participants. Outsourcing A conclusion to the make-or-buy decision in which the firm elects to purchase an item, as opposed to making it in-house. Partnering The process of forming a close, mutually beneficial relationship between two or more companies or between organizations within different companies. Partnering usually implies a sharing of risks and rewards. Perceived Quality A companys market reputation for quality of products, services, and customer satisfaction; the companys goodwill among customers. Pre-Qualified Partnering An environment in which the supply-chain partners are rapidly selected by pre-qualifying manufacturing capabilities, capacity to meet requirements, and financial viability. The goal of pre-qualified partnering is to shorten significantly the identification and rapid qualification of supply partners and thus reduce the total product development cost and time-to-market. Preferred Suppliers Suppliers who are chosen based on past performance that has exceeded or is anticipated to exceed customer demands. Proactive Marketplace Change Agent
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The pursuit of marketing strategies and tactics that anticipate changing market conditions. The process of taking the initiative in developing marketing strategies, products, and solutions that anticipate the current and future needs of a customer. Proactive Workforce An environment characterized by a workforce that takes the initiative in developing solutions for customers problems. Reconfigurable Resources In the context of human resources, an environment in which employees are empowered to interchange and reorient their roles as required to meet customers changing needs. In the context of physical resources, an environment where machines and equipment can be rapidly rearranged and redeployed to meet customers changing needs. Reengineering The fundamental rethinking and radical redesign of core business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed. Reengineering focuses on reinventing the core business processes rather than continuous improvement. Refined Accountability Processes An agile concept in which accountability in the enterprise is based upon the performance of process instead of on the performance of functional areas. In enterprises where empowered people participate in distributed cross-functional teams, performance measurement and robust feedback mechanisms are essential to ensure proper accountability at all levels. Shared Responsibility The condition in which all stakeholders in an enterprise are accountable for the companys performance. In an agile organization, the open access to information (such as financial and quality information) enables every individual in the workforce to know how his or her individual performance impacts the company as a whole, thereby facilitating shared responsibility. Shared Vision An image of the future state of an organization or company that is embraced by all stakeholders in the enterprise. Solutions Provider A company that configures its products and services into total solutions for its customers, and prices its products and services based on the customers perceived value. Strategic Intent A planning model promoted by G. Hamel and C.K. Prahalad that captures the essence of agile management principles. In summary, the model is based on the following principles: formulate and communicate a clear picture of company principles and commitments; leverage current resources to achieve bold goals; provide people with necessary physical and cognitive tools to enable them to meet the goals; and work to win universal acceptance of and responsibility for meeting corporate goals. Strategic Supply-Chain Management (SSCM) A business concept that seeks to maximize the manufacturing industrial competitiveness by optimizing the contribution of the supply chain. SSCM employs understandings from other business concepts, including Agility, Keiretsu, and Lean. Time-Based Costing An accounting procedure that considers an organizations ability to perform a task.
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Traditional Cost Accounting System A cost accounting system governed by Generally Accepted Accounting Principles (GAAP). See also Generally Accepted Accounting Principles. Value-Added Enterprise Metrics A class of measurements that enables one to assess the relative performance, worth, utility, or importance contributed by each process used by the enterprise in delivering a product or service to a customer. Value-Based Pricing A pricing strategy based on the value of products and services as perceived by the customer. Virtual Co-Location The application of networked computers, teleconferencing, telecommunications, and other simulations that enables remotely located members of a design team, customers, and suppliers to operate as though they were physically located in the same place. Vision-Based Leadership A leadership or management style in which the leaders collectively articulate and disseminate the strategic intentions for the enterprise; facilitated by empowering people with needed resources (such as information, budget, and equipment) along with appropriate authority and responsibility.
Note: The principal source for items in this glossary was the Compendium of Agility Terms created by the Agility Forum. The terms and definitions were modified to meet the needs of the Extended Enterprise Collaboration Paper. The publication of the Compendium of Agility Terms is supported by the National Science Foundation under Cooperative Agreement No. DMI-9696175. Any opinions, findings, and conclusions or recommendations expressed in that material are those of its author(s) and do not necessarily reflect the views of the National Science Foundation.
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January 1997
Prepared By: The NGM Advanced Manufacturing Systems & Operations Thrust Team
CONTRIBUTORS Tom Young, Sandia National Laboratories, Team Leader Dick Engwall, Westinghouse Electric Corp (ret) & R.L. Engwall Associates, Team Leader Jim Jordan, Consortium for Advanced Manufacturing International, Lead Author Hector Gallegos, Massachusetts Institute of Technology, Leaders for Manufacturing Dick Hartke, National Center for Advanced Technologies Merrill Hessel, NIST Manufacturing Engineering Laboratories Keith Jessen, Rockwell-Collins Alec Lengyel, Agility Forum Gene Meieran, Intel Corporation Fred Michel, Society of Manufacturing Engineers Steve Ricketts, National Center for Manufacturing Sciences Sal Scaringella, Agility Forum Mary Jo Scheldrup, Rockwell-Collins Tom Shaw, Andersen Consulting Dan Shunk, Computer Integrated Manufacturing Systems Institute, Arizona State University
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The NGM Framework

Global Drivers
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People
The NGM Company

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M - Medium Impact
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H H H M
Impact On
Change Management

H M M H H M L M H H
Global Drivers
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Technology
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Knowledge Supply
Product Life Cycle
Human Resources
Sourcing/Teaming
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Innovation
CONTENTS Executive Summary ....................................................................................................................................... 1 1.0 Imperative Definition ............................................................................................................................. 2 2.0 Enterprise Integration in the Next-Generation Manufacturing Company............................................. 5 2.1 Background: The NGM Enterprise .................................................................................................. 5 2.1.1 Premise ................................................................................................................................... 5 2.1.2 Trends: The Environment for NGM ...................................................................................... 5 2.1.3 Effects: The Responses to the Trends ...................................................................................... 6 2.2 Enterprise Integration: The NGM Definition................................................................................... 8 2.2.1 NGM Enterprise: An Extended Enterprise.............................................................................. 8 2.2.2 NGM Company: A Work Unit Within an NGM Enterprise .................................................. 9 2.2.3 Domains of Enterprise Integration .......................................................................................... 9 2.2.4 Teaming and Enterprise Integration ........................................................................................ 9 3.0 Relationship to NGM Attributes ......................................................................................................... 11 4.0 Barriers to Implementation .................................................................................................................. 12 5.0 Enablers to Overcome the Barriers ....................................................................................................... 13 5.1 Global Manufacturing Networks .................................................................................................... 13 5.1.1 Purpose and Stretch Goals..................................................................................................... 13 5.1.2 Key Characteristics and Their Status ..................................................................................... 14 5.1.3 State of the Art ...................................................................................................................... 16 5.1.4 Pilots of Emerging State-of-the-Art Extensions ..................................................................... 17 5.1.5 Resolution of Unresolved Issues ............................................................................................ 18 5.2 Innovative Organizational Structure ............................................................................................... 18 5.2.1 Purpose and Stretch Goals..................................................................................................... 18 5.2.2 Key Characteristics and Their Status ..................................................................................... 19 5.2.3 State of the Art ...................................................................................................................... 20 5.2.4 Emerging State-of-the-Art Extensions ................................................................................... 20 5.2.5 Resolution of Unresolved Issues ............................................................................................ 21 5.3 User Interfaces and Tools................................................................................................................ 22 5.3.1 Purpose and Stretch Goals..................................................................................................... 22 5.3.2 Key Characteristics and Their Status ..................................................................................... 23 5.3.3 State of the Art ...................................................................................................................... 24 5.3.4 Emerging State-of-the-Art Extensions ................................................................................... 25 5.3.5 Resolution of Unresolved Issues ............................................................................................ 26 5.4 Cultural and Complexity Assists ..................................................................................................... 26 5.4.1 Purpose and Stretch Goals..................................................................................................... 26 5.4.2 Key Characteristics and Their Status ..................................................................................... 27 5.4.3 State of the Art ...................................................................................................................... 28 5.4.4 Emerging State-of-the-Art Extensions ................................................................................... 28 5.4.5 Resolution of Unresolved Issues ............................................................................................ 29
CONTENTS (continued) 5.5 Operational Strategies for Performance Management ..................................................................... 29 5.5.1 Purpose and Stretch Goals..................................................................................................... 29 5.5.2 Key Characteristics and Their Status ..................................................................................... 30 5.5.3 State of the Art ...................................................................................................................... 31 5.5.4 Emerging State-of-the-Art Extensions ................................................................................... 32 6.0 Action Plans ......................................................................................................................................... 33 6.1 Clearinghouse for NGM Enablers................................................................................................... 34 6.2 Center for Teaming in Manufacturing............................................................................................ 34 6.3 Education and Training for Enterprise Integration ......................................................................... 35 6.4 Actions to Resolve Unresolved Issues .............................................................................................. 35 6.4.1 Semantics and Integrating Framework for Global Manufacturing Networks ......................... 35 6.4.2 Network Certification ........................................................................................................... 36 6.4.3 Global Regulatory Framework for Manufacturing Networks ................................................. 36 6.4.4 Intellectual Property Rights Agreements Supporting the NGM Company Model ................. 36 6.4.5 Change Identification and Change Management Tools ......................................................... 36 6.4.6 Conceptual Representation of Manufacturing Enterprise ...................................................... 37 6.4.7 Transparent Interfaces Between Human and Machine Intelligence ....................................... 37 7.0 Sources ................................................................................................................................................. 38 8.0 Glossary ................................................................................................................................................ 40
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ACRONYMS AND ABBREVIATIONS AIS AMD AMP AMS&O ARRI AVE CAD CAM-I CORBA CTM DARPA DMIS DoD ECI EDGe EDI GUI IMS IPT I/O IPPD IPR LAN MADM MANTECH MAP MEP MRP NCMS NGM NGME NII NIIIP NIST NSF OEM OIS Advanced Information Specification Advanced Micro Devices Agile Manufacturing Program Advanced Manufacturing Systems & Operations Automation and Robotics Research Institute Agile Virtual Enterprise computer-aided design Consortium for Advanced Manufacturing International Common Object Request Broker Architecture Center for Teaming in Manufacturing Defense Advanced Research Projects Agency Dimensional Measurement Interface Standard U.S. Department of Defense Electronic Circuits, Inc. Enterprise Development Group electronic data interchange graphical user interface Intelligent Manufacturing Systems integrated product team input/output Integrated Product/Process Development intellectual property rights local area network Multi-Attribute Decision Model Manufacturing Technology Manufacturing Applications Protocol NIST Manufacturing Extension Partnership manufacturing resource planning National Center for Manufacturing Sciences Next-Generation Manufacturing Next-Generation Manufacturing Enterprise National Information Infrastructure National Industrial Information Infrastructure Protocols National Institute for Standards and Technology National Science Foundation original equipment manufacturers Operator Interface Standard
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PC RAVEN R&D ROI RPPR SIMA SOI STEP TRP WAN WWW
personal computer Russian American Virtual Enterprise Network research and development return on investment rapid product/process realization Systems Integration for Manufacturing Applications Standard Operator Interface Standard for Exchange of Product Model Data Technology Reinvestment Program wide area network World Wide Web
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EXECUTIVE SUMMARY Enterprise integration connects and combines people, processes, systems, and technologies to ensure that the right people and the right processes have the right information and the right resources at the right time. It comprises all the activities necessary to ensure that, whether operating as an independent unit or and within extended enterprises, the NGM Company can function as a coordinated whole. Why is it Important? NGM enterprises will achieve new levels of responsiveness. This responsiveness will be achieved in teaming relationships and extended enterprises which will greatly increase the demands for information flow and control and will punish integration breakdowns. Such efficiency of integration is only possible in an enterprise where people, information, and business practices are seamlessly tied together. Key Concepts A consistent set of strategies, concepts, and values that guide business and product-related processes. These basic operational tenets are consistently implemented throughout the companys workforce, technology, and management practices, and in alignment with the companys performance objectives. Well-managed physical, financial, and people assets, with information infrastructures that bind the processes together. Development of the following enabling practices and technologies are required to overcome the barriers and address the drivers and attributes: Fully implemented, seamless, global networks Flexible, responsive organizational structures adapted to 21st Century needs User interfaces and tools that enable seamless knowledge access and exchange Tools to mitigate the effects of physical and cultural complexity and enable effective distributed, global operations across cultures Metrics and tools for operational strategies that enable companies to attain NGM attributes. Whats New? The uniqueness of this imperative is the concise compilation of the challenges of the integrated enterprise as a prerequisite to delivering solutions. Enterprise Integration is comprehensive, tying together human resources and technology to execute the business processes of the NGM Company and extended NGM enterprises. Existing systems and processes lack the ability and robustness to ensure seamless interoperability of computing tools, execute manufacturing planning and control across the enterprise, and integrate and control all manufacturing resources and processes. This imperative highlights these necessities and points to solutions. Action Recommendations 1. Establish a distributed Clearinghouse for NGM Enablers that documents and validates the maturity and characteristics of each enabler and documents relevant progress. 2. Establish a virtual Center for Teaming in Manufacturing to disseminate knowledge, pilot implementations, and identify education and training skill needs. 3. Establish unified semantics and an integrating framework for manufacturing information networks. 4. Establish standards and tools to ensure interoperability of networks and design/manufacturing systems. 5. Develop a global regulatory framework for manufacturing networks. 6. Develop intellectual property rights agreements supporting the NGM Company model. 7. Establish a coordinated program to develop and pilot a suite of change management methods and tools. 8. Develop conceptual models of the manufacturing enterprise which can be used by individual companies to model their businesses. 9. Develop user-friendly, transparent human/machine interfaces.
1.0 IMPERATIVE DEFINITION Enterprise Integration is the discipline that connects and integrates business and manufacturing systems so the right people and systems have the right information (in a usable form) at the right time. Enterprise Integration comprises all the activities necessary to ensure that the NGM Company functions as a coordinated whole, by itself and within extended enterprises,1 and includes: A set of strategies, architectures, concepts, and values guiding ongoing business and product-related processes, practiced by the Companys entire workforce, and aligned with specific Company performance objectives Enablers used in the well-managed physical, financial, human resources, and information infrastructures that bind the processes together. Cost-effective Enterprise Integration is needed to accomplish the transition to an NGM Company (Figure 1.0-1). Companies are responding to global competitive pressures by reducing the time it takes to bring new products to market. Indeed, meeting narrow windows of opportunity is just one area where margins of error are shrinking; the ever-present mantra of faster, better, cheaper means that products must meet customer wants, with quality that exceeds high customer expectations, at the right price, in just the right volumes, and manufactured and supported throughout their lifetimes in ways that meet tight legal, regulatory, and environmental constraints.
Attributes of Yesterdays Company Push Systems Fixed, Single-Purpose Plant & Equipment Individualist Imperatives Simplification of Processes for Minimum Human Content Local/Regional Market Focus Rigid, Hierarchical Organization & Culture Actions the NGM Company Can Take Alone Actions Requiring Cooperation of Industry, Education, &/or Government Attributes of the NGM Company Customer Responsiveness Physical Plant & Equipment Responsiveness Teaming as a Core Competency Human Resource Responsiveness Global Market Responsiveness Responsive Practices & Culture
Figure 1.0-1. The NGM Company that thrives in the next decade will shed old attributes and take on new ones. No company is an island. Even small NGM Companies will be shaped by global competitiveness and global marketing. Increasingly, NGM Companies themselves will be distributed across industrial sites, across regions, and across the United States. NGM Companies, whether they produce products for end users or are suppliers, increasingly will join other companies in nationally and globally distributed extended enterprises. These factors (Figure 1.0-2) will have fundamental structural effects on manufacturing and commerce: Pervasive Global Networks will transform and redefine manufacturing. Organizational Structures, flatter and based on a network model rather than a hierarchical one, will evolve to support rapid change. New User Interfaces and Tools will integrate the NGM Companys human and knowledge resources. An understanding of complexity, and methods and tools for handling it, will emerge. This complexity is introduced by cultural diversity, uncertainty, time pressures, and networked distribution of physical capabilities. Finally, NGM Companies will employ differing and dynamically changing operational strategies, based on improved metrics and performance management systems.
1
An extended enterprise is a group of companies that develops linkages, shares goods and resources, and collaborates to create a service or product.
Margins of Error All Processes Effects Time to Market Global Networking Fluid Organizational Structures User Interfaces & Tools Complexity New Strategies & & Metrics Globalization Time Enterprise Integration Enables... Quick & Accurate Decisons Timely & Responsive Operations NGM Company Attributes Customer Responsiveness Physical Plant & Equipment Responsiveness Teaming as a Core Competency Human Resource Responsiveness Global Market Responsiveness Responsive Practices & Culture
Complexity
Figure 1.0-2. Enterprise Integration is the way NGM Companies will use people, business processes, and technology to thrive. By recognizing fundamental company and market structures and objectives, Enterprise Integration enables the NGM Company to make quick and accurate decisions and conduct timely and responsive operations. The NGM Projects Advanced Manufacturing Systems and Operations (AMS&O) Thrust Area Team has identified enablers for the NGM Companys Enterprise Integration that mirror the fundamental effects: Global Networks Global networks must be more than simple data transport mechanisms. They must convey knowledge, not just information and data, in ways and formats useful to wide varieties of systems and people, and in time for effective use. Organizational Structures Traditional organizational structures inhibit timely decisions. New organizational structures, based on teaming , are emerging that drive more and more decision-making to lower and lower levels, forcing enterprises to develop new mechanisms for control that incorporate cooperation and coordination to attain enterprise goals. User Interfaces and Tools Current computer-based tools and interfaces between humans and automated systems are inadequate to operate NGM Companies at the floor, factory, or enterprise levels. Such tools must address people issues encompassing human factors, language, collaboration, culture, and education; computer science issues relating to the structuring of tools distributed across the network or that model distributed applications; and manufacturing sciences issues that relate to the optimal decomposition of manufacturing systems functions. Complexity and Ingrained Culture The NGM Company will operate within very complex, global systems. Factors causing complexity are physical, such as distributed operations within extended enterprises, and cultural, namely the wide range of corporate, discipline-oriented, ethnic, religious, and lifestyle languages and cultures that confront the NGM Company. It is difficult for any one company to comprehend all the issues that confront it, or to prepare for new, unexpected conditions. Operational Strategies and Metrics The NGM Company must evaluate many more factors than ever before as it develops its operational strategies to respond rapidly to unexpected change. There are significantly more operational strategy factors in the NGM Company needing evaluation for their impact on overall performance. Performance Measurement Systems will have to integrate performance measurements on all aspects of the companys business into metrics that lead to accurate and timely decisions. The performance measures must be appropriate within a local and NGM Company context, but still contribute to larger, enterprise issues. In this report, we assess each of these enablers and their major characteristics. Some enablers are maturing because of prior and concurrent initiatives. The NGM Company should track emerging technologies, processes, and systems and adopt them as soon as it is practical to integrate them into the companys ongoing op-
erations. Other enablers will not develop in a way that is useful to NGM Companies unless initiatives and programs are undertaken to conduct rigorous research into deep questions and then refine the results in realistic pilot applications. Some enablers will not mature without national and international governmental action to provide the appropriate legal and regulatory environment. Finally, Enterprise Integration involves the many processes and systems of the NGM Company; so, standards and certifications must occur if these are to work together reliably. The highest-priority actions (Table 1.0-1 ) are: 1. An electronic clearinghouse for knowledge of NGM enablers to provide a single source to aid early adoption of mature enablers. 2. A Center for Teaming in Manufacturing to disseminate knowledge of teaming in manufacturing to define and oversee the conduct of a change agenda to provide the tools, techniques, and legal and regulatory changes industry needs for effective teaming. 3. A national partnership of industry and education to develop, pilot, and disseminate educational programs (K-80 lifelong learning) for a workforce that functions effectively in integrated enterprises. This will include educational modules for complexity to help employees and managers (and future employees and managers) understand the complexity of NGM. 4. A program to develop common semantics for global networks supporting manufacturing, and a framework for global manufacturing networking. 5. A program to develop transparent human-machine interfaces so that humans can be fully functional in executing processes with the support of systems and technologies. 6. A program to develop a conceptual representation of a manufacturing enterprise to provide a rigorous basis for manufacturing systems development. 7. Bi-lateral and multi-lateral agreements establishing a global regulatory and Intellectual Property Rights framework for manufacturing networks supporting extended enterprises. Table 1.0-1. Recommended Actions
Actions Global Networks Organizational Structure User Interfaces & Tools Complexity & Cultural Assists Metrics & Performance Mgt
Balanced Score-card approach to NGM Company metrics Decomposition & Systemic changes in decision space tools enterprise metrics to encourage R&D & Decision propagainfrastructure funding tion analysis Annotated context- Risk/reward systems based on team ual interpretation contribution Diversity integra Metrics that facilitate tion tools participation in exten Education programs ded enterprises Outcomes for education about complexity Review for reduction of unnecessary complexity Accepted standards for Balanced Scorecard Laws, contracts, regulations, & trade agreements that facilitate participation in extended enterprises
Implementation Assessment & use of Internet-based netof Emerging working or InternetAdvances based intranetworking Development & Integration framework Pilot Implementations Agreed-upon semantics Pilot global manufacturing implementations
Movement to team- Consensus lookbased structures and-feel for PCwith flatter based interfaces hierarchies Alignment (Navigation) tools for teams Change ID & response planning tools Tools to support trust relationships among work units & among personnel Computational models of cognition & learning Conceptual models of manufacturing Machine translation Knowledge fusion Advanced mfg systems testbeds Interface standards (formal or consensus-based)
Standards & Certifications
Legal & Regulatory Change
EI semantics Individual & team level teaming skills Network security Network Robustness Enterprise education ID of legal & regula- Legal & regulatory tory impediments environment supportive of work Trade agreements force teaming based on NGM among all personmodel with strong nel levels IPR provisions Agreements to ensure global telecom at competitive costs
2.0 ENTERPRISE INTEGRATION IN THE NEXT-GENERATION MANUFACTURING COMPANY 2.1 Background: The NGM Enterprise 2.1.1 Premise A manufacturing enterprises primary purpose now and in the future is to provide solutions, combinations of goods, and supporting services, to internal or external customers, generally for a profit to the owner(s). The fundamental enabler for the NGM Companys profitability and survival will be its integrated human resources primarily its intellectual resources as the Companys people execute processes. Information technology will make it possible for people to use their intellectual capacities more effectively. 2.1.2 Trends: The Environment for NGM Current trends, set in place by todays slowly changing manufacturing policies and procedures, will continue. Additional changes will occur as new products, processes, and technologies become available, and as new markets and external forces emerge. Consequences of these changes may have effects in ways hard to imagine now. This section identifies key trends that will dominate future manufacturing; the next section, identifies effects of those trends. We foresee the following: Customers will become even more demanding, requiring customized products with their color, size, shape, and configuration tailored to specific wants and needs. The customer will want these products delivered to them quickly wherever they happen to be located; but, they will not accept any reduction in quality and they will want the lowest price. To meet these quality-cost-delivery-customization demands, especially with stiff global competition, companies must be globalized, with a network of factories, suppliers, distributors, and customer service centers spread across the globe. These global community enterprises will have to be agile, flexible, and responsive, even though they will span many time zones, be located in countries with vastly different cultures, have to deal with different values and financial conditions, master widely differing government regulations, and operate in many different languages. The workforce will be organized into teams representing the enterprises core competencies. Because some enterprise functions will be too costly or difficult to duplicate everywhere, they will have to be linked to the disparate factories and distribution centers, with 24 hour/day service, 7 days a week, regardless of geographical location. A vast network of interlinked functions will service these dispersed factories and their needs. Suppliers to these manufacturing enterprises will have to be linked into the same network, in order to supply their goods and services to the enterprise in a timely manner. As a result, suppliers will become a part of the enterprise as much as the customers are. Manufacturing across the world will merge into a global network of geographically dispersed extended enterprises, connecting factories, marketing, logistics, legal, organizational, engineering, testing, and product services, the customer base, and a distributed supplier base. Driven by rapid changes in the business, technology, or market, this global network will constantly change as new suppliers are brought in and old ones leave, as factory and other enterprise status changes, and as customers change. This will be a highly dynamic network, in contrast to the much more static enterprises of the past, where, for example, an automobile manufacturer relied on a specific set of suppliers, either owned or exclusively beholden to that particular car maker.
The global network will arise, with suppliers, customers, and enterprises linked together in ways only now becoming understandable. Since such links can be an array of communication mechanisms, systems and applications software, and languages, these global networks will have to be standards-based and hardware and software independent. Everyone will be able to communicate data and information in a variety of forms (voice, video, text, data streams, images, etc.) with everyone else, seamlessly, in a manner similar to todays voice telephone systems. Because of shorter time cycles between a customers order and their receiving the product, traditional hierarchical organizational structures will break down. There simply will be not enough time for making decisions in traditional structures. As a consequence, decisions will be made at a much more local level, by local experts, and communicated very quickly to everyone who needs to know. Hence, internal networks will arise, internal to NGM Companies, as complicated and interconnected as the extended enterprise network. Individuals, teams, and groups within a company will be dynamically linked to all other individuals and groups with whom they may need to communicate. Critical linkages will be those linking applications. Organizational structure, which will still consist of workers and supervisors, managers and individual contributors, will have to change dramatically. Self-directed teams will become prevalent and team rewards will become common. Many skills and expertise will be transient. Permanent headcount will be reserved for those who can make a sustained contribution to the NGM Companys competitiveness. Outsourcing skills needed only for short times will grow. Stable pools of external expertise will develop in informal or formal guilds of people with certifiable competencies. Certain NGM Company core activities representing unique enterprise aspects will be carried on by permanent employees possessing core competencies; for example, exacting manufacturing processes, the architecture for a logic chip, the wireless technology for a cellular phone, the lift behavior of new wing shapes. This new environment will comprise an autonomous network of people, many of whom are grouped in work teams, linked to each other and to all the machines and equipment necessary to design, make, and deliver a product, by a complex and open electronic network. Millions of individuals will be linked by millions of connections to other millions of people. These people will speak different languages, have different skill sets, follow different cultural patterns, be in different time zones, and work for a company whose headquarters and major sources of knowledge and expertise may be very remote. Computer and communications technology must become easier to use. Their use, difficult as they may be now, will become second nature so that wherever in the world people are, they can approach information technology without thinking about the technology, but only about the information they need or the problem they want to solve. 2.1.3 Effects: The Responses to the Trends The trends listed above are leading to effects already being realized: Effect 1: Large, electronic global networks will be established, with very high bandwidth and great capacity, to handle the electronic traffic. This is an enabler effect, in the sense that it will help people do their jobs better.2 Effect 2: A new organizational structure will emerge, resembling a giant semantic net, much like its electronic counterpart for communications but with meaning conveyed in the links. This effect is an accommodation of people and organizations to new working conditions. 3
The National Information Infrastructure (Information Superhighway), now beginning to support electronic commerce, is prototypical of the global networks that will reach into companies and homes throughout the world, transparently linking people wherever they are. Many companies are being pushed into innovative team-based organizations, changing almost organically. The have flattened management hierarchies and multiple dynamic links among teams. People will flow into and out of teams in natural ways as organizations adapt to changing cond itions.
Effect 3: To make the most efficient use of the strange new unified workforce, user interfaces, tools, and applications will be significantly improved.4 There will be a dramatic increase in tools and applications any individual will be able to use effectively.5 Effect 4: The trends will lead to enormous and unforeseen difficulties and major societal changes. Some of these will be obvious; work from home, for example, using a sophisticated set of machines to run factory operations, leading to greatly changed travel and social patterns of the entire workforce. Other, unpredictable changes they will result from new combinations of technology and social structures.6 Effect 5: One result of the first four effects is that companies will adapt operational strategies frequently to meet changing demands. To do so, a new set of metrics will have to be developed to allow realistic measurement of NGM Company operational strategy performance. There will be many new and different activities where traditional metrics, for example, cost reduction or throughput time decrease, are not valid. This is particularly true for developing the required infrastructure to attain next-generation manufacturing. A long and difficult education program will be needed to bring these new metrics into common use. This will be as difficult to manage as are the introduction of actual next-generation manufacturing technology and applications. There is no problem measuring the ultimate success or failure of the NGM Company from an operational strategy implementation standpoint, however there are real problems in measuring incremental benefits or progress. As infrastructure seldom has a definable return on investment (ROI), these methods will not work. Reduction in variation through advanced control technology may impact yield, but this is a secondary result, not a direct consequence of reducing variation. Indeed, most of the next-generation integration technologies will not result in first-order, measurable (and therefore salable) benefits. This metrology problem is not total; some issues will be easy to measure. For example, one can easily measure compliance to environmental regulations, even if one cannot directly measure the benefit (to the individual, company or society) of introducing new environmental standards. One can measure reduction in variation, even if the exact benefits are unknown. Other benefits may, however, be very difficult to assess. For example, having many people in instantaneous communication with one another is expected to result in faster problem identification, or in better problem prevention, but it is difficult to measure the benefits of not having a problem, since there are so many ways in which problems can be prevented or solved quickly. Hence, one may have to take some of these actions on faith; they are carried out because they have the "ring of rightness" about them. In any event, it will be necessary to generate a whole new set of metrics to measure the new integrated enterprises success from an operational strategy implementation standpoint. ROI and other traditional measures will be only partially useful, and trying to tie all the activities directly to factory performance metrics such as cost, quality, and delivery will likely be unsuccessful.
One can imagine all sorts of devices and applications that can improve the human efficiency of this virtual enterprise: automatic and real-time language translators; intelligent agents to seek out problems or data; large-screen PCs to facilitate conferencing; better concurrent engineering tools; telepresence and tele-everything (surgery, equipment repair, material analysis, etc.); real-time 3D vision systems; highly accurate speech and handwriting recognition systems; clever and burglar-proof security systems; object libraries; and more. This effect will lead to profitable new businesses as more and more of the routine aspects of designing, developing, making, and delivering product are taken over by computers and machines. Effect 3 will also lead to unprecedented manufacturing productivity improvements, as more and more routine mental tasks will be delegated to computer and other decision-assisting tools, much the same way that physical labor was replaced at an unprecedented rate when electric and gasoline motors were used to amplify human strength characteristics. In terms of human productivity improvement, we have barely scratched the surface, and coping with the results of the changes in peoples work will be a real challenge. Employment will change. There will be churn in the kinds of jobs and the numbers employed in them. Just-in-time learning will become routine. Remote job management will become easier as tele-everything is developed. Social consequences will include increased security risks and information violence will increase; legal precedents will be set as computer systems are sued for negligence and malpractice. Distinctions between human intelligence and machine intelligence will blur. People will be deluged with knowledge and information, and likely will be mentally unprepared for this knowledge onslaught or will lose the capability to solve simple problems like balancing a checkbook manually. There may be battles between the computer literate (who can afford computers) and the computer illiterate, who may think their jobs are in jeopardy and their usefulness challenged. These are a few of the social consequences that might arise from use of computers in the workplace, and probably deserve more serious attention than do the technological issues of connectivity, open architecture, knowledge systems, high bandwidth, AI, and the like. There will be a REAL challenge for the workforce of the future,to retain its sanity in the face of massive, rapid, and overwhelming change in the fabric of society.
2.2 Enterprise Integration: The NGM Definition Figure 2.2-1 is a model of the NGM Company, composed of people executing business processes, supported by enabling technologies, all in response to the NGM Companys strategy and often in collaboration with customers, suppliers, and other companies. Enterprise Integration is the discipline that connects and integrates people, business processes, and technologies so the right people and systems have the right information (in a usable form) at the right time. That is, Enterprise Integration comprises all activities necessary to ensure the NGM Company functions as a coordinated whole, by itself and within extended enterprises. Enterprise Integration includes: A set of strategies, architectures, concepts, and values guiding the ongoing business and product-related processes, practiced by the companys entire workforce, and aligned with specific company performance objectives. Enablers binding well-managed physical, financial, people, and information infrastructures together.
Education & Training Knowledge Supply Chain Workforce Empowerment Innovation & Change Management Workforce Flexibility Demand Generation Extended Enterprise Collaboration
People
Rapid Product/ Process Realization Demand Fulfillment
& Operational Strategy
Manufacturing Processes Equipment Tools Materials Infrastructures Physical Information
Business Processes
Business Processes Intellectual Property Rights Legal, Accounting, & Regulatory Product & Customer Support
Technology
The NGM Company
Figure 2.2-1. The NGM Company will be a complex mix of people and processes, supported by systems and technology, integrated across the company, and with partners in its extended enterprises. 2.2.1 The NGM Enterprise: An Extended Enterprise The Next-Generation Manufacturing Enterprise (NGME) will typically be an extended enterprise7 made up of a collection of work units, working autonomously but collaboratively, to meet a specific customer need. Work units will provide capital and intellectual resources to the enterprise; they may work with some suppliers in conventional supplier relationships, although the trend is toward demanding intellectual and equity contributions from suppliers, thus promoting them to peers among work units. Work units will typically be NGM Companies, or entities within the NGM Company with profit and loss responsibility. NGMEs are likely to form quickly to address a transient market opportunity, operate to meet the opportunity, and then mutate or terminate when the market opportunity changes or disappears. NGMEs will be dynamic.8
7 8
Frequently in the literature, the term virtual enterprise is used equivalently to extended enterprise. A scenario for a 21-day time-to-market product, dubbed the Everygirls le hunc Personal Digital Assistant, may be found at http://www.aechelous.com/adtech.html
2.2.2 NGM Company: A Work Unit Within an NGM Enterprise The NGM Company generally will engage in multi-venturing; i.e., an NGM Company will be a work unit in one or more extended enterprises NGMEs merging its core competencies with a different set of other NGM Companies in each extended enterprise. There are two related sets of issues in Enterprise Integration: Internally, the NGM Companys decision-making, business, and product-related processes must be integrated to achieve company goals A given NGMEs collective decision-making, business, and product-related processes must be integrated to achieve the enterprises goals. Traditional infrastructures of todays manufacturing companies infrastructures often closed and proprietary must be opened to accommodate dynamic participation in NGMEs. 9 2.2.3 Domains of Enterprise Integration There are three important domains of Enterprise Integration: Decision Systems Integration for Extended Enterprise Decision-Making . Each NGM Company must make key decisions, but which decisions must be made in coordination with decision-makers in partnering NGM Companies? Does a market opportunity exist? Is an extended enterprise needed to satisfy the opportunity? Who are the right partners? Is the deal right? Is it time to change the enterprise? Business Systems Integration. Business Systems include traditional processes supporting any company: strategic planning, investment, financial planning and control, human resources, information resources, and resource allocation. Manufacturing Systems Integration. Manufacturing Systems10 include product-related processes encompassing the complete product life cycle, from product conception and market development, through product and process design and development, production, marketing and distribution, and maintenance, to product recycling or reclamation. Enterprise Integration is not new, nor are the basic business processes described here. What is new for the NGM Company is the need to make decisions involving globally distributed partners and operations, much more quickly and accurately than possible in todays companies, and to do so in rapidly and unpredictably changing conditions. 21st Century Enterprise Integration in the United States will have succeeded if the preponderance of U.S. companies can make executive and operational decisions when they need them, whether the decisions lead to marketing a new consumer electronic product in 2 weeks or completing a firstproduction airplane within a year. 2.2.4 Teaming and Enterprise Integration At the most fundamental level, the enterprise is people - customers, leaders, designers and developers, shopfloor production workers, and those who sell, distribute, service, and recycle its products. At this fundamental level, NGME integration is the integration of peoples activities. The ways in which human resources people and teams of people will learn, work cooperatively, and communicate in nemes will be central themes of enterprise integration. The basic paradigm for the American workforce will be changed from individual contributions to one based on teams of contributors. Team dynamics will be central to the success of NGM Companies. This is recognized in the NGM Company attribute, Teaming: a Core Competence. Teams will have to form quickly, operate effectively, and dissolve gracefully. There are two aspects of teaming to be considered:
9
While this is written from the perspective of a small or medium-sized NGM Company participating with other companies in an extended enterprise, the discussion is applicable to ventures involving several large companies, and increasingly to projects within companies that cut across organizational lines. 10 Note that this usage of manufacturing is in the Big M sense and is much more inclusive of the product life cycle than usages limited to production processes (the little m connotation of manufacturing).
Interpersonal Teaming - An NGM Companys workforce will operate in small teams empowered to operate semi-autonomously and making consequential decisions that may affect company success or failure. teams will take risks for themselves and on behalf of the company. Teams will be transient, operating only as long as the team is needed. Interorganizational Teaming - Organizations will work together to achieve the Companys and the Enterprises objectives. Interorganizational teams will behave analogously to interpersonal ones, empowered to make important decisions and take significant actions autonomously on behalf of the entire extended enterprise. There are deep issues of trust, culture, and communications that will be resolved in responsive and effective NGM Companies. New team-based risk and reward structures will emerge. Teams will blur the distinctions between managers and employees. People will join and leave teams depending on the need for their skills. Teams themselves will adapt to changing conditions.
10
3.0 RELATIONSHIP TO NGM ATTRIBUTES The effects described previously can provide an environment in which a manufacturing company can thrive. Whether the company can shape the effects in ways that will support its particular operations and its unique success depends on how well the NGM Company integrates such effects into its decision-making and operations. If Enterprise Integration is effective, the company will have the attributes of an NGM Company. The socioeconomic drivers (shown in Figure 3.0-1) are described in the Volume I, NGM Project Summary Report, in which there are also detailed discussions of NGM Company attributes. That such effects will occur in the next decades is inevitable. It also is inevitable that companies will be forced to respond to the effects. Successful companies will use the effects as part of their transformation to NGM Companies. Enterprise Integration will provide the linkages that make it possible for companies to use the effects in time to make a competitive difference. There are barriers to effective Enterprise Integration. These are described in the Section 4. Not surprisingly, they can easily be mapped against the effects described in Section 2. Section 5 describes a set of enablers and characteristics which again map to the effects that will allow for Enterprise Integration at the level of effectiveness required for companies to achieve NGM Company attributes.
Margins of Error All Processes Effects Time to Market Global Networking Fluid Organizational Structures User Interfaces & Tools Complexity New Strategies & & Metrics Globalization Time Enterprise Integration Enables... Quick & Accurate Decisons Timely & Responsive Operations NGM Company Attributes Customer Responsiveness Physical Plant & Equipment Responsiveness Teaming as a Core Competency Human Resource Responsiveness Global Market Responsiveness Responsive Practices & Culture
Complexity
Figure 3.0-1. The NGM Company will thrive using Enterprise Integration in responding to global competition.
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4.0 BARRIERS TO IMPLEMENTATION Barriers to Enterprise Integration for the NGM Company can be related to the effects described in Section 2.1.3 and include: Insufficient Global Communications Globally competitive NGM Companies will be companies that can communicate quickly and accurately with all their customers, partners, and operations. The large global networks must be more than simple data-transport mechanisms. They must seamlessly convey knowledge and information, not just data, in ways that can be used by wide varieties of systems and people in a timely manner. The NGM Company will need access to global networks with higher global capacity, more robust reliability, better security, and a higher level of control than now exists. Outmoded Organizational Structures Traditional organizational structures inhibit timely decisions. New organizational structures are emerging that drive more and more decision-making to lower and lower levels, forcing enterprises to develop new mechanisms for control and for human resources, mechanisms that emphasize cooperation and coordination to attain enterprise goals. Inadequate Tools and User Interfaces Todays computer-based tools and the interfaces between humans and automated systems are inadequate to operate NGM Companies at the floor, factory, or enterprise levels. There are people issues relating to ease of understanding and ease of use of manufacturing systems that encompass human factors, language, culture, and education. There are computer science issues relating to the structuring of tools distributed across the network or that model distributed applications. There are manufacturing sciences issues that relate to the optimal decomposition of manufacturing systems functions. Complexity and Ingrained Culture The NGM Company will operate within very complex, global, systems. We do not have the tools to ameliorate complexity be it product complexity, process, systems, or especially the NGM Companys human resources. Complexity makes it difficult for any one company to comprehend all issues confronting it or to prepare for new, unexpected, conditions. A major inhibitor is the general lack of awareness of, let alone use of, systems thinking. The educational process in the United States is oriented to narrow disciplines that are not integrated into systematic problem-solving. Traditional hierarchical organizations have narrowly defined job skills; as a result, the American workforce is ill-prepared to consider complex systems, especially ones in which there are inherent uncertainties. Inadequate Methodologies, Tools, and Metrics for Operational Strategy Evaluation The NGM Companys operational strategy must adapt to changing market and global conditions. Performance management systems in the NGM Company will have to integrate operational strategy performance measurements on all aspects of the companys business into metrics leading to accurate and timely decisions that improve overall operational strategy performance. The performance measures must be appropriate within a local operation and also within the larger, extended enterprise. Other barriers that prevent enterprise integration are described in the other NGM Imperative papers.
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5.0 ENABLERS TO OVERCOME THE BARRIERS For each of the Barriers listed in Section 4, there are obvious Enablers: Fully implemented, seamless, knowledge-rich, global manufacturing networks Organizational structures adapted to 21st Century needs User interfaces and tools for seamless use of human and machine intelligence Complexity and cultural assists to permit effective distributed, global operations across cultures Metrics and tools to develop operational strategies that will drive the NGM Company toward the NGM Company Attributes.
In the subsections below, each of the Enablers is discussed in more detail by stating stretch goals for a mature NGM Company, assessing the state of the art, discussing emerging developments, and summarizing a few requirements for bringing enablers into routine use in NGM Companies. At the end of this section, we assess the human resources and the information technology considerations for each Enabler. In Section 6, we discuss action plans by which NGM Companies can apply the Enablers. 5.1 Global Manufacturing Networks 5.1.1 Purpose and Stretch Goals National networks are essential today to major manufacturers processes; global networks will be absolutely essential for U.S.-owned NGM Companies. Networks for the transport of intellectual assets will be the 21st Centurys analog to the 19th Century railroad networks and the 20th Centurys interstate highway system for the transport of physical assets. Increasing requirements for process flexibility, growing governmental regulatory and environmental pressures, and customer demand for an increasing variety of product and option variation, exacerbate manufacturing complexity and will drive the need for global networks. As information and information exchange become more valuable to economic performance, those countries that develop an effective advanced information infrastructure will gain competitive advantage in global markets. Instead of just chasing low wages, as has been the trend in the recent past, manufacturers increasingly will choose to locate and invest in countries whose infrastructure is able to handle rapid and efficient information control and dissemination and the integration of diverse business operations. An effective, advanced National Information Infrastructure (NII), making the United States a country of choice for manufacturing and manufacturing R&D, can make an enormous and lasting positive impact on our national economy and our standard of living. To be fully effective, global networks must enable three or more individuals in very different countries and cultures to work together in a virtual workcell - at short notice and on a critical, short-term project as if they were long-time team members in a single location and from a single culture. To achieve this, the networks must: Transport high volumes of data at rates that can support real-time interventions and with high integrity and security Present just enough information to each individual, just in time and in a language- and culture-sensitive form useful to the individual Enable individuals to learn and to innovate Facilitate cooperative work among geographically and culturally separated individuals Quickly and seamlessly integrate people and intelligent machines into smoothly functioning systems.
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5.1.2 Key Characteristics and Their Status Global electronic networks are developing rapidly from rigid, proprietary communications and computing hardware and software into very flexible, open systems. The maturity of the characteristics and the issues to be resolved before they can be implemented routinely in NGM Companies are summarized in Table 5.1.2-1. (Similar tables are provided for all five enablers.) The single most important issue in global networking is interoperability . Interoperability is a complicated, multi-layer problem shown schematically in Figure 5.1.2-1.11 Table 5.1.2-1. Characteristics for Global Manufacturing Networks
Key Characteristic Maturity Unresolved Issues
Interoperability
Excellent progress being made at computer science level. Many vendors provide most of needed capability, and new capabilities are being brought to market. Result is families of interoperable programs that may not interoperate with other families. Problems of interoperability of manufacturing applications are much more serious.
Security
Robustness
Bandwidth
Access
Affordability
Application to manufacturing enterprise integration requires framework for interoperability. Need standardized semantics to define common data objects used by plug-&-play applications. Trustworthy bilateral and multilateral agreements should be put in place to permit NGM Companies to operate within globally extended enterprises. Several research lab efforts and industry Need pilot implementations of secure pilots are providing security at a level manufacturing systems implemented on acceptable for most electronic commerce. public networks. Need acceptable certification standards for security that each new platform or application entering a system must meet. Conflict between private and public security interests must be resolved in a way that maintains security of legitimate business. Users and teams need education and training in security considerations when using public networks. Communications companies can guaran- Generally acceptable certification standards tee robustness of proprietary networks, for robustness that comm vendors can use but no such guarantees are not yet possito measure and market their capabilities. ble on Internet. Technological solutions for adequate Context-sensitive tools needed to help limit bandwidth exist in pilot implementations requests to data, information, and knowland labs. edge applicable in context. Users need education and training in context setting and network use. There is routine access to the Internet As the individual becomes more of an available at acceptable costs in many independent contractor, there is need for locations. wider-spread network access. Foreign and international telecom prices Costs for routine Internet access are frequently set through non-competitive falling, driven by market forces. There processes. Need to rationalize prices by is strong competition among vendors of opening global telecommunications to marproprietary intranets. For many compaket forces. nies, costs of global networks are small relative to benefits.
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There are several formal descriptions of layers of interoperability, especially for the lower layers used here. Those descriptions are used for standardsetting. The layers described here are intended only to give a qualitative feel for the issues of interoperability in manufacturing companies.
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Manufacturing Systems Layer

Interactive, Multicultural Decision Systems Knowledge Delivery Systems
Product & Process Layer

Manufacturing Applications, Solid Models, Process Plans, Bills of Material, Electronic Commerce
Computer Systems Layer

Plug-&-Play Hardware & Software, Operating & Networking Systems, User Interfaces, Middleware
Communications Systems Layer

Transport Mechanisms & Protocols Across Multiple Telecommunications Providers
Figure 5.1.2-1. An NGM Companys systems must interoperate at many levels. The Communications Systems Layer deals with the transport of signals from one computer system to another across a multiplicity of technologies and service providers. The Computer Systems Layer deals with computer hardware and softwares ability to accept signals and present them to the user or to the manufacturing applications. This layer includes the operating systems, the networking systems, and much of the generic application software often called middleware needed to support specific manufacturing applications. The manufacturing applications are at the heart of the Product and Process Layer, in which results of one application are to be used in other applications including solid models, various product and process databases, and other product- and process-specific applications. The Manufacturing Systems Layer provides the interface between the user of one computer system and the user of another as they work collaboratively to execute and control manufacturing processes and make critical decisions. Interoperability is pervasive in many of the NGM Imperatives and even in this report, it is a theme within the other enablers. The popularity of open systems is based on the relative ease with which new hardware/software platforms can be brought into the network and on the accompanying capability to integrate new applications software into network-based manufacturing systems. The NII and the efforts of major vendors to develop plug-and-play capabilities are making excellent progress. Most of the computer science and other technical issues appear to be solved or nearing solution for the Communications Systems and Computer Systems Layers. However, there are much more difficult issues for manufacturing enterprise integration. While many manufacturing applications exist, the interfaces that will permit them to be used together easily are not defined. This lack of defined interfaces makes integration very difficult. Any effort to integrate all aspects of the NGM Company into an enterprise manufacturing system requires a framework for interoperability, a structure and set of rules to guide the linkage of discrete applications into integrated systems. No framework exists that is generally applicable and can be personalized for each NGM Company, making it difficult for NGM Companies to work together. Interoperable applications within manufacturing systems require using the same semantics; i.e., meanings of data objects cannot change passing from one application to another. Together, framework and semantics are necessary prerequisites to defining interfaces. Interoperability among companies will require that products and systems adhere to standards supported by end-users and vendors. Global interoperability at the enterprise integration level requires a relatively uniform regulatory regimen consistent with international law, with international trade agreements, and with strong international protections for intellectual property. No global electronic network, proprietary or public, will be free of security concerns. Todays public networks have well-known security flaws, although there are many implementations in which companies have decided that protections available in common Internet-based products are adequate, at least for
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routine electronic commerce. Security issues must be solved at a level satisfactory for a broad consensus of companies likely to participate in extended enterprises. Another unresolved security issue is balancing the security needs of private companies and the equally real needs of governments to protect countries against malevolent transactions. Substantial federal and private sector investment addresses security issues; results of these efforts need to be adapted for use in NGM Companies and extended manufacturing enterprises. The global electronic network must exhibit robustness; i.e., it must be reliably accessible at least at the U.S. telephone network level, and transactions across the network must be completed within consistent and guaranteed time limits. The network must have sufficient redundancy to thwart the effects of sabotage or natural disaster. Robustness is closely coupled with bandwidth. Adequate carrying capacity makes it much easier to guarantee service levels. Market forces are driving communications companies to put physical infrastructure in place to provide much broader bandwidth, especially in the U.S. Other countries provide varying levels of capacity; in some cases (e.g., Singapore) the widespread use of fiber optics provides excellent bandwidth; in other cases, bandwidth may be limited to that available through public telephone circuits or radio-telephony. Bandwidth requirements are influenced by use patterns. Numerous tools can reduce bandwidth requirements. Broadly speaking these are active filters, context-sensitive in limiting the request for information that, say, one application makes of another, which also limits user training and education in setting context for requests of remotely located users and applications. Access is a limiting factor for small companies. As companies become more distributed, it will be more important that individual employees have access to the enterprises integrated systems from wherever they are. In most of the U.S. and in many other countries, the Internet provides access at relatively low cost, but access to proprietary networks may be prohibitive. Affordability. The cost of routine access to the Internet is relatively low in most parts of the United States, with adequate bandwidth to support enterprise integration for a distributed-manufacturing enterprise. Cost increases as the needs for bandwidth increase, as the time dependencies of the applications become more demanding, and when access is required outside the United States. Costs are falling because of competition among Internet Service Providers. 5.1.3 State of the Art The state of the art is dominated by global networking issues and successes involving communication and computer systems. Information technology was originally built onto existing production processes, resulting in islands of automation. Companies have compensated by building local area networks (LANs) to integrate floor-level activities. The Manufacturing Applications Protocol (MAP) succeeded in defining many of the important issues for shop-floor integration. Some companies also sought to integrate their global operations using large mainframe computers and proprietary wide area networks (WANs). During the 1980s, multinationals such as IBM and Texas Instruments developed global networks facilitating integrated operations. These networks provided data transport mechanisms that allowed workers at multiple locations to cooperate on product design and provide management data that could be rolled up to higher corporate levels. Significant difficulties remain due to different semantics and protocols of different LANs and WANs. Compounding these difficulties are when NGM Companies need to work with other companies with different information technologies and systems. Recently, some companies have turned to open systems Internet technology to implement both LANs in the factory and office and WANs for national and global enterprise functions. Some companies are using the public network, others use proprietary physical networks (intranets), but in either case they use open-system technologies, networking software, and user facilities. The most popular examples of networks using open systems technologies are client/server systems, in which a microprocessor supports local computing functions and is serviced by a larger machine for specialized functions, typically database, transaction processing, and printing functions, but also including more specialized
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services such as mathematical modeling, language translation, and so forth. With the advent of low-cost, high-performance microprocessors and multi-processing operating systems, the distinction between clients and servers is breaking down, with machines at the nodes of the network serving as both clients and servers. An extensive effort, known as the National Information Infrastructure (NII), partially supported by the federal government, is being made to develop the public network into a robust and secure network of peercoupled processors capable of supporting electronic commerce, including electronic data interchange (EDI), shared activities, confidential information, and financial transactions. 5.1.4 Pilots of Emerging State-of-the-Art Extensions The important state-of-the-art extensions are those in which the problems being attacked are those at the Product and Process Layer and the Manufacturing Systems Layer of Figure 5.1.2-1. The NII will enable manufacturers to integrate and access critical information throughout a products life cycle, from market assessment and R&D efforts to after-sales support and product disposal or reuse. Manufacturers will use the NII to quickly and efficiently transfer data within and among operations; to effectively and sensibly transact business and collaborate with customers, clients, and competitors; to rapidly and "virtually" prototype, simulate, and test products and processes; and to make easily and readily available the best manufacturing tools, knowledge bases, product information, and training materials regardless of location. The National Institute for Standards and Technologys Systems Integration for Manufacturing Applications (SIMA) program12 is the lead joint industry-government effort to ensure the suitability of the NII to support U.S. manufacturing. The vision of the National Industrial Information Infrastructure Protocols (NIIIP)13 project is to make U.S. industrial companies more globally competitive and efficient by taking advantage of recent advances in object information technology [Common Object Request Broker Architecture (CORBA)], product data definition [the Standard for Exchange of Product Model Data (STEP) standards effort], and communications networks (Internet) to assemble Virtual Enterprises. GLOBEMAN 2114 is an international Intelligent Manufacturing Systems (IMS) 15 project that is developing mechanisms for global enterprise integration within a consortium of U.S., Australian, Canadian, European, and Japanese companies. A second IMS project, Next Generation Manufacturing Systems 16, is looking specifically at the issues of systems that integrate the manufacturing functionality of autonomous and globally distributed work units. Both IMS projects assume the use of an Internet-based networking infrastructure. RAVEN17. The Russian American Virtual Enterprise Network (RAVEN) is a pilot project that is using the public network (Internet) to give U.S. companies access to special resources and technologies available in the former Soviet Union. While RAVEN will use, rather than develop, the basic information technology available on the Internet, it will test the feasibility of building applications that support multi-national, multicultural business relationships.
12 13 14 15
16 17
Contact: Mark Luce, National Institute for Standards and Technology (NIST), Gaithersburg, Md. The NIIIP Project is partially funded under the Technology Reinvestment Program (TRP). Contact Richard Bolton, IBM at http://niiip.niiip.org Contact Bill Georges, Newport News Shipbuilding, Newport News, VA. The International IMS activity is a set of collaborative R&D projects for advanced manufacturing technologies, processes, and systems. The projects are conducted under agreed Terms of Reference that include intellectual property rights negotiated by the participating governments. For more information, see http://www.imsorg.org Contact Ray Limoges, Consortium for Advanced Manufacturing - International at http://www.ngmnet.com The RAVEN Project is partially funded by NSF. Contact Ian-Richard Robinson, Institute for Manufacturing and Automation Research at http://www.ngmnet.com
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5.1.5 Resolution of Unresolved Issues Research Requirements Research is needed for: An integration framework for an NGM Company that includes globally distributed operations and participation in extended manufacturing enterprises An agreed-upon, logically consistent and mathematically rigorous, set of semantics used throughout the framework. Standards and Certification Industry, with government support, must take the lead in developing standards for: Enterprise integration semantics Interoperability at the transport, network systems software, and manufacturing applications level Certification of network security Certification of network robustness.
Legal and Regulatory Actions We recommend that: A study be undertaken to identify existing bilateral and multilateral agreements that impede global competition or collaboration Bilateral and multilateral trade agreements based on the model of globally extended enterprise and with strong protections for intellectual property rights be established and enforced International agreements be put in place that will open global telecommunications to competitive responses to market forces. Pilot Implementations We recommend that there be distributed testbeds established for pilot implementations of Internet-based networks, using the semantics and frameworks developed according to those given in Section 6.4.1, that can support NGM Company participation in globally extended enterprises, especially in non-traditional settings. The emphasis of the testbeds should be on demonstrating interoperability across major subsystems, on security, and on robustness. 5.2. Innovative Organizational Structure 5.2.1 Purpose and Stretch Goals Organizational structure provides and organizes enterprise resources so they can be best used to accomplish enterprise objectives. NGM Company organization must enable it to compete profitably and effectively in a dynamic marketplace with rapid technological change. The market imperative of rapid responses with the right products, in the right places, at the right times, combined with emerging information technologies, will force further extrapolation of team-based concepts, and hence the further transformation of enterprise organization. In particular, knowledge retrieval and delivery technology will make it possible to form teams combining human and machine intelligence in natural ways and will permit greater fluidity among the enterprises work units. The goal for each NGM Company is to have the right organizational structure as it operates to meet each market opportunity. That is, organizational structures must: Be responsive and rapidly adaptable to new circumstances Enable rapid and accurate decision-making using the most appropriate combinations of human and machine intelligence
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Accommodate the proliferation of machine intelligence capabilities to finer and finer grained manufacturing systems (in so-called smart parts and brilliant machines, parts and machines with attached computing hardware and software that will enable floor-level decisions adapted to real-time conditions) Enable and support distributed teams that mix human and machine intelligence and operate semiautonomously within widely varying cultural backgrounds. 5.2.2 Key Characteristics and Their Status Organizational development trends strongly emphasize using employees combined knowledge and intelligence for rapid and high-quality decisions. From the perspective of Enterprise Integration, characteristics shown in Table 5.2.2-1 support integrating people and processes within an NGM Company. Orientating the workforce so that all work toward company enterprise-level goals has been termed Navigation. As used here, the term is more dynamic than just promoting a shared vision; it includes the ability to interpret objective enterprise goals in actionable terms. The NGM Company needs to be agile, that is, capable of responding constructively to unpredicted change. Part of the change response is likely to be Adaptive Reorganization; that is, the ability to reorganize and spontaneously emerge to meet new conditions. Teaming is fundamental to NGM Company organizational forms: among workers within co-located teams (that may involve both traditional managers and traditional workers), across distributed teams, across teams and work units within companies, and across companies within extended enterprises. Enterprise integration success will depend on company teaming skills.
Enterprise Integration for the NGM Company, as noted above, will depend on the integrated knowledge and intelligence of the entire workforce. For many companies the shared responsibility for knowledgebased decisions will require that employees have Enterprise Education and Training; i.e., they will need additional education and training on the context and significance of their work.
Table 5.2.2-1. Characteristics for Innovative Organizational Structure
Key Characteristic Navigation Maturity Typically, companies seek to establish shared vision and mission and use information dissemination tools to convey business objectives. Often indulge in top-down programs; e.g., quality programs, to provide context within which employees work. Traditional companies often reorganize, but usually after the fact and in costly ways. Business process re-engineering is a static process that helps companies reorganize to meet current conditions. Some companies (e.g., Johnson Controls, TI) have workforces well-educated on teaming. Experience shows employees with teaming skills can be productive, but that establishment of teams without teaming skills may not yield expected benefits. Little formal education & training on enterprise issues. Some companies circulate balance sheets to focus attention on financial health. Curricula that emphasize enterprise issues are being piloted (e.g., under NSFs Advanced Technological Education program) Unresolved Issues Expectation is that employees & teams set context for decisions aligned with companys toplevel goals. Manual mechanisms being piloted to accomplish this, but there is need for reliable methods that can be partially automated to reduce overhead navigation costs. Need mechanisms & tools to help individuals, teams, & companies identify when change has occurred, & to characterize the change Similar need for mechanisms & tools to help develop best response to change, to structure responsive & efficient organizations. Key issue in teaming is rapid development of trust relationships among people within the NGM work units, among work units, and between collaborating work units in different companies. Need techniques & tools for learning about enterprise issues.
Adaptive Reorganization
Teaming Skills
Enterprise Education & Training
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5.2.3 State of the Art Most enterprises are still structured in traditional hierarchical organizations. The hierarchies are decomposed in one or a combination of three basic models: Functional decomposition into the so-called silos or stovepipes (e.g., research, development, manufacturing, marketing) Geographical decomposition (e.g., eastern region, western region, international region); in the case of suppliers, geographic decomposition may result from co-location with major customers More recently, decomposition by brand or product family. Management systems usually are the channels for hierarchical organizations to direct and control enterprise activities. 18 This is overwhelmingly true of small and medium-sized companies, and generally true of larger companies. It is also true of most extended enterprises, in which one entity takes responsibility for command and control. Matrixed organizations, in which personnel from different functional hierarchies are brought together to form a project team, provide one hybrid example of the traditional structures. State-of-the-art thinking asserts that an enterprises organization should promote more rapid decision making, encourage flexibility, and use the practical workforce knowledge. Leading-edge companies evince the following trends: Flatter hierarchies Instances exist where seven levels have been replaced by three. Many middlemanagement control functions are being replaced by electronic data reporting in near-real-time with decision support tools. Team decisions vs. dictated directions Taken to its natural limit, the team is self-directed and even selforganizing. A parallel trend exists toward multi-disciplinary teams that combine different processes and functions for large-grained tasks. Fluid organizational forms and virtual co-location To achieve transitory objectives. In response to competitive pressures, Chrysler Corporation developed a focused organization, the platform team, to develop the LH series of cars. This team integrated many of the marketing, design and engineering, and manufacturing functions, using information technology to support the integrated function. This organization significantly reduced development time, and industry has quickly replicated it with success. Texas Instruments military products group developed a team structure in which teams are certified as to the level of responsibility the team can take on with success. In this structure, the best (Level 5) teams are selfdirected after having been assigned high-level goals. In 1992, IBM established a virtual enterprise, PowerParallel Systems, within its existing organization, to merge core competencies in microprocessor development and production, in mainframe computer production and applications, in market development, and in computer science research to quickly develop, bring to market, and deliver the worlds most powerful parallel processing computer. PowerParallel Systems achieved its goal in late 1993. 5.2.4 Emerging State-of-the-Art Extensions Significant interest exists worldwide in applying complexity theory to the organization trends noted above. The basic unit to which complexity theory is applied is the team, a small group of people sharing individual competencies to achieve a team goal. This has led to the description of enterprises made up of teams that work autonomously, but cooperatively, to achieve enterprise objectives. Many companies, such as Johnson Controls, are implementing teams and team-based structures empirically.
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Even in hierarchically managed companies, operational decisions are often made sub rosa in an informal network of workers at operational levels.
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One application of complexity theory is the Fractal Company concept 19 promoted by Prof. Hans-Juergen Warneke, President of Germanys Fraunhofer Society. In this case, manual systems are modeled on mathematics fractals. Every enterprise level is imprinted with characteristics of self-similarity, and is also selforganizing. A key Fractal Company aspect comes in goal-setting and goal-propagation, characterized by navigation, or the interpretation of enterprise goals by the fractal in terms of what the fractal itself can do, and the alignment of the fractals activities with the enterprise goals. A second key activity comes with adaptive reorganization of the fractals in the face of changed conditions. The Fraunhofer Societys Institutes in Stuttgart and Magdeberg have piloted Fractal Factory concepts in several dozen small and medium-sized companies, often with excellent results. Similar work is being done by groups loosely associated with the Santa Fe Institute, a focal point in the United States for research into complex systems. The Agility movement20 has drawn on the analogies developed by these groups, without incorporating the mathematical apparatus for analysis. Japanese groups are exploring so-called biological manufacturing systems21 with the intent of automating concepts very similar to fractals. The Holonics Project 22 being conducted within the international IMS activity has also explored the development of organizations based on holons, atomic organizational units not unlike fractals. The Santa Clara Valley of California (Silicon Valley) provides an example of a collection of high-tech manufacturing companies all operating for individual profit but with mutual dependencies for market development and technological advances. Mediated by a strong electronic backbone, a growing inventory of tools for electronic data interchange and electronic commerce and by a common entrepreneurial culture, the Silicon Valley has been characterized as a single, very large extended enterprise. 5.2.5 Resolution of Unresolved Issues Research Requirements Research is needed for: Techniques and automated tools that help employees, teams, and companies identify changing conditions in real-time, characterize the change, assess its significance, and devise a timely, cooperative response to the change Techniques and automated tools that help employees, teams, and companies make decisions that align their activities with company and extended enterprise goals and optimize NGM Company people, processes, systems, and technologies Techniques and automated tools for quickly establishing trust within teams of people Techniques and automated tools for quickly establishing trust among organizations such as work units within NGM Companies. To the extent possible, the techniques and tools resulting from this effort should be provably correct. Standards and Certification We recommend a cooperative effort of industry and education, mediated by government, leading to standards23 for entry-level teaming skills and enterprise knowledge. These skills and knowledge should be in addition to more basic and advanced technology- and process-related skills that entering employees may be expected to have attained in schools, colleges, and universities. Minimum educational levels should be mapped against industry-defined skill levels.
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H.J. Warnecke, The Fractal Company (Springer Verlag, Berlin, 1993). Contact: Rusty Patterson, Agility Forum at http://www.agilityforum.org Contact: Woody Noxon, Consortium for Advanced Manufacturing International at http://www.ngmnet.org Contact: Jim Christianson, Rockwell Automation (Allen-Bradley), Cleveland, OH. It is not our intent to enter into the politics of codified national educational standards, but to assert the need of NGM Companies for entry-level employees who meet a national, industry-derived consensus on the understanding and skills of teaming and of the enterprise so that the employees can fully participate in NGM Companies and extended enterprises distributed across the country.
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Legal and Regulatory Actions Current law and many union contracts inhibit flexible and responsive teaming of management, non-union workers, and unionized workers. As the roles of managers and workers are redefined in NGM Companies, there is a need for law and contracts that facilitate teaming while respecting the rights and needs of unionized workers. 5.3 User Interfaces and Tools 5.3.1 Purpose and Stretch Goals Information technology was originally built onto specific, existing production equipment and processes by developers who often invented the underlying software and interface concepts while focusing on specific markets. The result is a plethora of more-or-less proprietary tools and interfaces embodying incompatible semantics and computing technologies. These incompatibilities are costly: Incompatibilities lead to uncertainties in data, information, and knowledge that is inherently deterministic as they are transmitted from process to process or from process to human. Uncertainty leads to slowed decision processes and mistakes in communication. Data, information, and knowledge are frequently useful to only a small subset of the enterprise or not available in a timely or useful form. People who move from process to process or from machine to machine must unlearn the old tools and interfaces and learn the new ones. Dealing with these incompatibilities has been estimated to cost U.S. industry billions of dollars each year. User interfaces and tools that facilitate seamless integration of human intelligence into systems must reduce these costs. The stretch goals: Transparent Interfaces between humans and the NGM Companys systems that: Are consistent across all media and applications Adaptable to cultural and linguistic diversity Use all sensory media appropriately and cost-effectively Enable transparent programming24 by all employees. Support coupling human and machine intelligence into productive, cost-effective teams. Aid manufacturing personnel to quickly find, analyze, filter, and synthesize vast amounts of data to provide manufacturing decision support. Real-time modeling and simulation tools to predict product, process, and system failures and provide alternative, perhaps even optimized, solutions to avoid failure and to ensure highest quality. Real-time tools and applications that are: Flexible, modular, and adaptable Components for rapidly reconfigurable systems Self-tuning and self-maintaining Emergent in response to new requirements.
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Transparent programming is programming using non-conventional methods that permit those not trained in explicit programming languages to program new applications in their natural languages and media. Some object-oriented visual programming applications approach being transparent programming languages.
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5.3.2 Key Characteristics and Their Status Table 5.3.2-1 summarizes key characteristics for interfaces between humans and machines in enterprise-wide systems. A primary condition for the near-transparent interface between people and machines in NGM Companies is ease of use, or minimum impedance between human and machine intelligence. The common graphical user interfaces (GUIs) found on workstations and PCs provide a starting point for easy-to-use interfaces Visual languages often better convey knowledge and standard graphical presentations minimize human effort. There is, however, much more to ease of use. For many, the keyboard is a significant impediment. For others, poor ergonomic design can render an interface nearly impossible to use. Table 5.3.2-1. Key Characteristics for User Interfaces and Tools
Key Characteristic Ease of Use Maturity PC-based interfaces use common look & feel & may incorporate multimedia. Visual programming & object technology reduces effort in programming for non-programmers. Simple tools that adapt interfaces to specific users (e.g., in word processing programs). Keyboard & optical character recognition are most mature I/O. Speech recognition & synthesis are acceptable in many applications, but require significant training. Tactile sensors available, but not employed often. Virtual reality offers integration of multi-sensor I/O. R&D in progress in all these areas. More flexible data repositories allow disciplineoriented groups to have common sets of data presented in discipline-specific language. Systems for machine translation from language to language systems are moving into practical applications. Unresolved Issues Conflict between idea of interfaces incorporating common look/feel vs. adapting interfaces to the individual user styles. There is an inadequate understanding of the cognitive science & computer science issues involved in creating a transparent programming language. Multi-sensory I/O integrated is too costly for widespread application. Virtual reality needs to be coupled with product, process, & facilities models to build realistic simulations that employees can use to learn & to experiment with new processes. Need to develop realistic pilot applications in a manufacturing context. Full function machine translation systems are costly & do not provide high-quality translation for general applications. No tools for easy adaptation of computer programs & systems to specific cultural norms. Need concept representation able to represent time-dependent multidimensional manufacturing products & processes, & tools that can articulate concepts into useful documents in variety of natural languages.
Multi-Sensory Input & Output
Culturally Sensitive Systems
Some automated knowledge acquisition systems use learning & other advanced AI algorithms. Improved techniques for data acquisition & fusion of data from several sources. Knowledge representation, using rules, concept definition languages, etc. are nearing practical applications. Search & retrieval algorithms often incorporate learning to develop context sensitivities. Presentation of knowledge is increasingly tailored for multimedia. Data acquisition techniques build redundancy into Need adaptive, context-sensitive or Missing & model-based techniques to ID & data sets & analysis techniques compensate for Uncertain compensate for missing/uncertain data missing data. Data in critical decision-making applications. Standard statistical methods & stochastic methods compensate for uncertain data. Enterprise Modeling Existing enterprise modeling tools (e.g., based on No practical tools to model timeIDEF modeling protocols). varying manufacturing enterprises. & Simulation Knowledge Acquisition, Representation, & Delivery
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As noted above, the typical GUI and keyboard interface may be inappropriate. There is need for interfaces that include auditory and tactile sensors, as with virtual reality, and for multi-sensory input/output. An NGM Company may have a company-wide culture, but it is also likely to span a wide variety of cultures; some are the traditional functional cultures of finance, engineering, production operations, and so forth; others are the ethnic and linguistic cultures found within the distributed workforce. Integrated systems will need culturally sensitive interfaces to reduce learning overhead and/or using unfamiliar language couched in foreign culture. The user interface ultimately is only as good as the underlying tools for knowledge acquisition, representation, and delivery. Computer science and artificial intelligence have gradually moved beyond the era of database schema and expert systems to model- and case-based acquisition, representation, and delivery. Presentation of knowledge needed for complex decisions remains difficult. Note that the knowledge representation should be language- and culture-neutral, but that knowledge acquisition, and especially knowledge delivery, need to be culturally sensitive. An NGM Companys integrated systems must support decisions under extreme time pressures. Humans and automated systems will need to deal with missing or uncertain data. Enterprise Modeling and Simulation tools will be required for strategic and operational decision-making. They are required for enterprise investment decisions as well as for business, process, and product modeling. These tools should have provision for inputs of NGM Company metrics in real time, and the capability of modeling a mix of real and simulated operations. 5.3.3 State of the Art Traditional enterprise integration in large companies is based on a centralized model. This is reflected in the information technology base used: mainframes with centralized databases and dumb terminals with highly structured, single-purpose interfaces. Traditional enterprise integration has not, in fact, integrated many of the activities of the enterprise that are automated with specialized systems; many remain stand-alone and are not interoperable. Further, traditional enterprise integration does not reach to the real-time activities on the shop floor or to the logistics systems. Traditional enterprise integration has depended on proprietary or customized commercial software written in so-called Third or Fourth Generation computer languages, using outmoded tools to build systems that are hard to design, code, implement, test, and use. As companies have decentralized, they have adopted decentralized information technology strategies. The most common of these are based on client/server systems. These in turn are being networked, so that the emerging architecture is one where processors interconnected on enterprise-wide networks simultaneously function as clients (communicating with individual humans) and as servers of information services. Generic commercial packages that are not customizable, but which admit flexible models of enterprises, are gaining favor. These packages often take on an aspect of modeling languages, in which the user is led by graphical interfaces to decompose generic applications and access databases into enterprise-specific models. Various methods so-called wrappers are used to encapsulate legacy systems, the systems running traditional, but still useful, enterprise integration applications that are written in old-style programming languages and that would be costly to rewrite. The wrappers provide interfaces through which the legacy systems can communicate with newer applications. Although conceptually easy, there are frequent conflicts in semantics that make it difficult to fully integrate legacy and modern systems. New interface technologies are being introduced in specialized situations. For example, voice recognition is being used in applications where hands are not free: chemical analysis, solder inspection, printed wiring assembly rework and repair, and so forth. In other cases, familiar user technology is being standardized to reduce retraining time; for example, many measuring machine vendors are using the proposed Operator Interface Standard to move operators from one vendors machine to another with minimum retraining. Enterprise systems also are using newer information technologies, such as expert systems and neural networks, for synthesizing and filtering data. Groupware is being used to support collaborative work.
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Examples of the state of the art include: Boeing, with the 777, has done more than most companies in achieving a total digital product. Boeings major prime contractor partners all designed their key sections of the airplane using the CATIA CAD package. Other engineering, manufacturing, and simulation and modeling packages were integrated with CATIA so parts, subassemblies, and processes could be viewed electronically. The significant investment in capital, software, and training paid off since the electronically designed parts fit when assembled for the first time. Boeing treated the electronic product/process database as an asset that enabled them to offset costly physical prototypes. Walmarts commitment to enterprise integration was based on a vision of wiring a real-time informationsharing logistics network from the purchase, receipt, and storage of raw materials or goods to value-added operations, and to subsequent internal distribution to geographically distributed stores for sale to consumers. In so doing, they dramatically reduced inventory through every step of the process. They were able to make purchasing decisions much faster than their competitors in adjusting to local consumer demand. Walmart treats information as an asset, not as cost. 5.3.4 Emerging State-of-the-Art Extensions Table 5.3.4-1 shows information technologies being explored to meet requirements for future manufacturing. There are many pilots of advanced information technology for user interfaces. In general, these test specific technologies, such as English/Japanese translators, used for incremental improvement. There is, however, a growing infrastructure of standards, most notably STEP standards for product data exchange, but also more fine-grained standards such as the Dimensional Measurement Interface Standard (DMIS) and the Operator Interface Standard (OIS). There are several laboratory experiments of advanced collaborative computing environments; e.g., at Xerox Palo Alto Research Center. These pilots extend the state of the art represented by PC-based shared work environments and teleconferencing with multimedia technology for visualization and virtual reality. There are only limited pilots that bring these technologies to the manufacturing domain. The sum of all of the emerging technologies presents a challenge: if one integrates the many technologies optimally, what would the NGM Companys manufacturing cells and manufacturing systems look like? Would the transformation of manufacturing be as radical as that caused by todays simple electronic communications technology? There are no public testbeds to pilot the answers to these questions. Table 5.3.4-1. Information Technologies Employed by the NGM Company
User Interface/Tools Attribute Interface Transparency Emerging State-of-the-Art Extensions Workstation interfaces with uniform look & feel for all machines in a cell Object-oriented technology; e.g. active objects Code repositories with front end search/archive tools Groupware Animation, visualization, virtual reality & holography Graphics/voice-based control & pen/stylus input Natural voice input & programming Machine translation Object-oriented technology; e.g. active objects Data mining tools (filtering, analysis, synthesis) Groupware Model-based application generation Model-based control systems (predictive control) Object-oriented technology and high-level languages Real-time product/process failure prediction through in-process verification STEP Advanced network control & management tools Code repositories with front end search/archive tools Enterprise linkage tools Autonomous agents Emergent behavior Object-oriented technology; e.g. active objects
Knowledge Delivery
Real-time Product, Process, & System Modeling & Simulation
Interface & Tool Adaptability
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5.3.5 Resolution of Unresolved Issues Research Requirements Research by interdisciplinary teams focused on the needs of manufacturing is needed for: Representing an NGM Companys knowledge, fused from many sources, at a conceptual level expressible in various formats and languages. Modeling the human factors of transparent interfaces to the machines of the NGM Companys manufacturing systems. Standards and Certification There should be standardized testbeds that incorporate NGM Company needs for new user interface technologies, systems, and tools. Testbeds and Pilot Implementations There is need for a virtual assessment center to evaluate maturing user interfaces and tools under realistic manufacturing systems conditions and disseminate results to facilitate early adoption by NGM Companies. 5.4 Cultural and Complexity Assists 5.4.1 Purpose and Stretch Goals This section deals with the tools, methodologies, and other assists to help the NGM Company deal with complexity issues. There are two broad categories of complexity: physical and cultural. The complexity of the communications infrastructure that binds an enterprise together cuts across both categories. Physical complexity includes the complexity of modern products, international markets, and globally distributed processes, especially when viewed across product life cycles. The problems introduced by complexity are exacerbated by the NGM Companys need to make decisions very quickly, adding complexity when the companys operations are distributed across many time zones. Cultural complexity includes issues relating to: Corporate cultures and work-unit sub-cultures Team-based dynamics and cultures The ethnic, religious, and lifestyle cultures found within the NGM Company and among its customers, partners, and suppliers The cultures embedded in the laws, regulations, and business practices of the various countries in which the NGM Company operates Language differences among functional units, and regional ethnic groups within the Companys primary language(s), and among the several languages the NGM Company may require in the course of its business. The goals for this Enabler are tools and mechanisms to manage the complexity of next-generation manufacturing and resolve cultural differences confronting the NGM Company. These assists are needed to: Provide the knowledge for decision-making in a form that simplifies the decision-making processes for manufacturing personnel. Eliminate mismatches from discipline-oriented, regional, or ethnically based cultural differences. Support multicultural teams.
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5.4.2 Key Characteristics and Their Status The NGM Company and its extended enterprises will be complex by nature and operate globally in a world even more complex. Complexity has many sources: Time pressures the need to make decisions quickly, based on inputs from many dynamic sources Market complexity as markets splinter into quantity-of-one demands Physical complexity of distributed work units Cultural complexity of globally distributed work units Complexity introduced by rapid geopolitical and socioeconomic change.
Some issues of culture were dealt with in Section 3.3. as they relate to user interfaces. Other issues of complexity and culture are summarized in Table 5.4.2-1. Table 5.4.2-1. Characteristics for Cultural and Complexity Assists
Key Characteristic Simplification Tools Maturity Some tools available for representing complex systems. Graphical tools most useful for high-level decomposition or representing less-complex subsystems. Intelligent agents that can conduct simple negotiations being developed & tested. Unresolved Issues No tools available that can reliably decompose complex structures or processes using typical datastreams or other data representations. Negotiation agents should be tested in realistic manufacturing enterprise testbeds. Context- & culture-sensitive trust generating & affirming agents need to be developed. Need automated tools that can be used in developing operational strategies.
Relationship Tools
Enterprise Tools for Diversity
Education for Complexity
Cultural complexity dealt with almost exclusively manually, with some augmentation with data collected to satisfy government regulation. Aside from occasional college course Need enterprise education & training at that explores issues from systems all levels (K-80) of educational system. perspective, there is very little education for complexity in educational institutions or companies.
Simplification Filters and Tools Given the complex environment in which NGM Companies make decisions, and the decisions themselves, there is a need to filter information to that solely for and in a form appropriate to the decision, and to reduce decision space to only those factors. Tools should be able to predict the effects of local decisions throughout the NGM Company as a local decision guide. Relationship Tools Typical relationships between work units within companies or between companies are formalized in standards for business behavior, in agreements and contracts, and in the law. The formalities vary by culture and lead to difficulties business and manufacturing operations. For example, Asian business practices can be baffling to a U.S. Company, but U.S. business practices can be equally baffling to an Asian company. Enterprise Tools for Diversity The NGM workforce, even if contained within a single U.S. region, will be diverse, with little homogeneity of religion, race, or ethnicity, with employees from all sorts of family situations, and with various disabilities. Great cultural variations will be the norm. Diversities will vary from work unit to work unit,
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each defining a mini-culture within the NGM Company. Enterprise-level strategies and tools must integrate diversity factors objectively and constructively into strategic and operational processes. Education for Complexity The U.S. educational system is predicated on decomposing knowledge into deterministic disciplines. Rarely are interdisciplinary issues studied, and more rarely are non-deterministic issues examined. The extended educational system of the NGM Company must prepare managers and workers for decisionmaking in the face of complexity and uncertainty so that decisions and actions will be optimized in synchronization with the whole of the enterprise. Educational systems must improve analytical skills and the ability to synthesize knowledge into practical solutions. 5.4.3 State of the Art Few tools assist in dealing with complexity. Those that do tend to be simplistic and built out of necessity 25. The mechanisms by which one partner is confident another will do what it committed to comprise the key to extended enterprises. Manufacturing companies participate in extended enterprises now, but these enterprises tend to be rigidly defined either through long-term relationships (an automotive company and its hierarchical tiers of suppliers) or voluminous contracts negotiated in costly and time-consuming processes. The physical complexity of producing varying products in multiple and geographically separated locations for widely separated markets is being dealt with by manufacturing resource planning (MRP) systems with incomplete success. One aspect of these systems, as time becomes an increasingly dominant factor in market penetration, is the need for accurate information available locally, in the market, and with remote decisionmakers. The myriad problems of incompatible computer applications, networks, software, and hardware are well-documented. For example, the functionality of electronic communications networks is the result of a great deal of trial-anderror. The World Wide Web is a response to Internet complexity and the complexity of knowledge people want to access and exchange. Paradoxically, the Web provides worldwide access to knowledge, breaking down some knowledge barriers, but even so the Web is derivative of early, very open, but technologistdefined Internet culture that conflicts with other cultures with which it must co-exist. Increasingly, companies deal with cultural diversity locally, mostly in the context of relationships within a workforce with diverse ethnic and cultural backgrounds. Few companies do more than train assignees in the cultures of the foreign countries in which they operate. There is a growing movement toward inclusion of integrative problem-solving projects in K-12 and higher education, leading to an increase in graduates who have been exposed to systems thinking. In some states, however, some in the back-to-basics movement have devalued integrative, team-based learning. Several multi-nationals e.g., IBM and Texas Instruments have large information networks enabling worldwide operations. These networks help manage physical complexity, but not cultural complexity issues. A few companies have automated (or semi-automated) translation facilities, primarily for internal use but increasingly as a service offering. The U.S. Department of Commerce has an English/Japanese translation service that is usable by knowledgeable people, although inadequate for purists, and not in real-time. 5.4.4 Emerging State-of-the-Art Extensions Emerging state-of-the-art extensions include: A mathematical theory of the soft sciences, Situation theory, is being explored in multicultural business situations to help facilitate organization and communication within such situations. Some of the tools being used with the World Wide Web incorporate the results of psycholinguistics; i.e., they are suited to natural language derived from usage by certain cultural groups. Intelligent agents that can conduct simple negotiations are being developed.
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For example, it is not unusual to gauge the complexity of a process by graphing it and then by counting the number of transactions across the graph, without analyzing the complexity of the individual transactions.
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5.4.5. Resolution of Unresolved Issues Development Requirements Development is needed for: Tools that facilitate the decision support Decomposition and bounding of the decision space Analysis of the propagation of decisions across manufacturing systems Tools that can be used in culturally sensitive contextual interpretation of transactions across manufacturing systems Techniques and tools that can enable multicultural teaming Educational programs that help employees understand and deal with complexity in the modern manufacturing enterprise. Legal and Regulatory Actions There needs to be an analysis of existing law, contracts, and regulatory practice to reduce unnecessary complexity. Simplifying actions should then be taken. 5.5. Operational Strategies for Performance Management 5.5.1 Purpose and Stretch Goals An NGM Companys operational strategies will have to be agile, that is, adaptive to unpredicted change. They will also have to be accurate, because NGM Companies will have little margin for error. An enterprisewide performance management system (Figure 5.5.1-1) is needed to support operational change strategies for reducing cost, time, and investment while maximizing enterprise outcomes (e.g. employee morale, shareholder value, customer satisfaction, public service) in consort with the strategic intent, vision, mission and strategic plan of the enterprise.
NGM Company Vision, Goals, & Strategic Plans
Evaluation
Change Strategies
Enterprise Architecture
Improvement Interventions
Outcome
(To Be Maximized)
Suppliers
Inputs
Waste
Analysis & Controls
Resources
Material, Capital, Energy Human, Data Technology
Customers
TransFormation Processes
Outputs
Customer Satisfaction Employee Morale Shareholder Value Public Responsibility
Measurements
Excellence
Figure 5.5.5-1. The NGM Company must have an accurate and timely performance management system.
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The performance measurement system must be able to measure and evaluate interventions needed in material, capital, energy, human, data, and technology to create value, improve processes, and eliminate waste. The performance management system must: Identify resource costs consumed in performing significant enterprise activities (Cost Accounting) Determine activity efficiency, effectiveness, and resources used (Performance Measurement) Identify and evaluate new activities to improve future performance (Investment Management). Performance measures for the enterprise must include a set of broad metrics that relate to the enterprise processes. These measures must place greater emphasis on non-financial attributes such as cycle time, schedule attainment, and process yield to provide a product that delights the customer not just meets specifications. A predictive accounting system based on the product life-cycle processes must be developed. Cost-effective, timely feedback of financial and non-financial performance is essential to ensure accountability for effective management of implementing operational strategy. Process improvement requires measuring all resources (such as material, capital, energy, human, data, technology) to control their use, minimize waste, and maximize outcomes to achieve excellence. Such a closedloop performance feedback process achieves accountability for every process at all levels. 5.5.2 Key Characteristics and Their Status Key characteristics summarized in Table 5.5.2-1 include: The U.S. has key socioeconomic and political factors that reward increases in short-term profits and growth. As a result, capital cost and availability in the U.S. is a major barrier to global competitiveness. Immediate sales growth is required for companies to justify the significant investments needed to sustain economic growth and future earnings. U.S. financial sources such banks cannot own stock in companies, but institutional organizations and individual investors can. Table 5.5.2-1. Key Characteristics for Operational Strategies
Key Characteristic Low Cost & Readily Available Funds for Capital, Research, & Infrastructure Maturity U.S. socioeconomic & political system puts companies at disadvantage with rest of world. Gap in availability of capital is getting bigger. Investment in R&D, infrastructure is inadequate to maintain competitiveness. Slow but gradual improvement in U.S. companies recognizing advantages of teaming. Rewards for team and enterprise performance gaining emphasis over individual performance, although methods used to assess/reward team performance are inadequate. Many global competitors recognize need for performance measurement/metrics beyond short-term financial results. Concept of balanced scorecard is emerging within some leading U.S. firms, but at very slow pace. U.S. technology suppliers are getting weaker except for computer & software companies. Most tech suppliers are smaller, financially strapped, stand-a-lone companies competing globally against much larger, financially sound competitors with strong ties to customers. Requirements Public and private sectors must change regulatory laws and enterprise-level metrics to cause systemic change in provision of capital, &D funds, and infrastructure investment for sustained, long term growth. Top/middle management, unions, academia, & government must make systemic changes in enterprise performance metrics & management, reward structures, & education & training to promote effective teaming. Top/middle management, unions, academia, & government must make systemic changes in all levels of performance management, operations, & education to use consistent set of performance measurements capable of supporting long-term strategic goals. Need incentives to support our technology suppliers. Need massive education program stressing importance to nation of U.S. vendors with competitive U.S. manufacturing equipment & tooling technology, processes, & systems.
Team Incentives & Rewards
Balanced Performance Measurement & Metrics
Inclusion In Extended Enterprises
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In contrast, financial institutions in other parts of the world, particularly Europe, Japan, and the Far East have equity relationships with not only the original equipment manufacturers (OEMs) but also many key suppliers and other members of the extended enterprise. The focus of these tightly knit extended enterprises is more on economic growth and the financial health of the extended enterprise than on short-term financial earnings per share. Secondly, the U.S. emphasizes individual achievement. The entrepreneurial spirit is limited to a few Corporate entrepreneurs. As noted elsewhere in this paper, the model of work being decomposed into simple tasks for individuals is being replaced by one requiring collaborative intellectual contributions of teams, often behaving as entrepreneurs. The performance measurement systems must be transformed to recognize, value, and reward team contributions. U.S. top management for the most part focuses more on individual product performance than optimizing the enterprise. U.S. middle management and professionals are the same. The rest of the world focuses on longer-term company performance. Rational long-term performance management requires developing and using a balanced set of performance measurement and metrics. In many parts of the world, the extended enterprise consists not only of OEMs and their component and subassembly suppliers, but also their technology suppliers. Many equipment and tools suppliers in other parts of the world are divisions, or at least business partners, of the OEMs. U.S. technology suppliers often stand alone and struggle to serve many U.S. customers and markets, all with a different user view. There is little standardization as each supplier seeks advantage through proprietary systems. 5.5.3 State of the Art Many companies recognize that continuous process improvement is essential to survival. Using integrated product teams (IPTs) and an empowered workforce has led to single process-derived performance measures tailored to an individual process or to a combination of processes (as in the case of implementing Rapid Product/Process Realization). An excellent treatise of total organizational productivity measurement/ management in the future manufacturing paradigm can be found in Managing Quality and Productivity in Aerospace and Defense26, the paradigm that subsequently evolved to the Toyota Production System. or Lean Manufacturing. further described in the 21st Century Manufacturing Enterprise Strategy developed in 1991 by a team of experts from 13 manufacturing organizations in conjunction with the Iacocca Institute at Lehigh University. In the past 2 decades, consortia such as CAM-I, ARRI, and NCMS, and federal agencies such as DARPA and the Air Force MANTECH program, funded R&D projects to develop and pilot methodologies and systems with a broader enterprise view. The demonstrated results are mostly intra-organizational or within a traditional supplier chain only, not with an extended enterprise. Activity-based costing, which emerged in the mid-1980s, is another example of leading-edge management concepts, focused on a new way of performing cost management27. Subsequent books by Drs. Robert Kaplan, Robin Cooper, Robert Howell, by management consultants, and by others adequately addressed cost and investment management. Most recently Kaplan (Harvard Business School) and David P. Norton (Renaissance Solutions) developed and promoted use of a balanced scorecard as a strategic management system. The balanced scorecard is like the dashboard an airplane cockpit with dials that measure both overall financial performance and operational performance to provide answers to four basic questions:
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How do customers see us (customer perspective)? What must we excel at (internal perspective)? Can we continue to improve and create value (innovation and learning perspective)? How do we look to shareholders (financial perspective)?
27
A report, published in 1988 by the Defense Systems Management College, resulting from a 5- year study by the Army Productivity Research Office, the DoD Office of Industrial Productivity, Dr. D. Scott Sink of Virginia Polytechnic University, Dr. Thomas C. Tuttle of University of Maryland Center for Productivity and Quality of Work Life, Price Waterhouse, LTV, and Westinghouse Electric. The initial conceptual design was published in a CAM-I report, Cost Management For Todays Advanced Manufacturing.
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The American Productivity Center, the American Supplier Institute, the Virginia Productivity Center, and the Maryland Center for Productivity and Quality of Work Life have performed studies and benchmarked organizational productivity measures, both financial and non-financial, since the early 1980s. Most Baldridge Award winners have instituted new performance measures to better achieve continuous process improvement. Similarly, many companies that have undertaken comprehensive business process re-engineering have instituted new process metrics for those processes, however, not until recently has anyone reported on a topdown-driven set of metrics and systematic performance measurement/management system to drive all enterprise stakeholders to achieve strategic and tactical objectives. 5.5.4 Emerging State-of-the-Art Extensions The Agility Forum is actively pursuing new approaches to performance measurement with its Agile Virtual Enterprise (AVE) Enterprise Development Group (EDGe). Their approach is primarily focused on measuring agility in a virtual and distributed enterprise rather than on Company-level organizational enterprise performance. Considerable research is being conducted in developing new metrics used in measuring agility. In fact, enterprise metrics, performance metrics, capitalization, and partner qualification are some of the AVE Framework elements being explored. The Agility Forum is also developing an Enterprise Performance Assessment Tool to be used at the strategic level of a company to help it determine where it is with respect to state-of-the-art industry leaders and to help determine what actions it needs to take to become more agile. A considerable number of management consulting companies as well as manufacturing companies themselves, have developed Quality Function Deployment tools and formal benchmarking protocols to help ascertain the actions a company should take to become more globally competitive. An initial study was conducted by the Agility Forum in 1994 to identify core parameters of an agile manufacturing enterprise and their impact on cycle time, quality and cost. Kaplan and Norton have published case studies on use of the balanced scorecard, working with Electronic Circuits, Inc. (ECI), an electronics contract manufacturer, and Rockwater, a subsidiary of Brown, Root and Halliburton. Texas Instruments, Hewlett Packard, Milliken, Apple Computer, and Advanced Micro Devices (AMD) have also piloted the balanced scorecard approach with great success. The process of understanding ones business and establishing performance measures and metrics proves as important as the actual metric values themselves. A comprehensive pilot study was conducted in 1992-3 by the Air Forces Electronic Systems Center with 14 leading aerospace companies augmented by management consulting organizations. The Phase 1 Enterprise Analysis program focused on vertical and horizontal aerospace industry-wide enterprise analysis. A comprehensive enterprise integration investment methodology was developed to provide a structured approach to identify the best enterprise integration projects for investment. The methodology links the enterprises strategic business plan to the needs and requirements for process and infrastructure improvements. The methodology also includes a means to form projects with maximum impact on stated needs and requirements, and to evaluate these projects in terms of investment criteria. Similar work in the commercial sector led to the definition of Information Economics,28 a methodology for aligning information systems investment strategies with business strategy. DARPAs Agile Manufacturing Program (AMP) sponsored research on business practices for Activity Based Costing for Agile Manufacturing Control with Industrial Technology Institute and Metrics for the Agile Virtual Enterprise with Sirius-Beta. DARPA is funding R&D to develop the business practices, factory practices, and engineering practices needed to reduce the DoD portfolio of tactical missile systems by 50% in product life cycle cost and 50% in new product cycle time. Building on work done for NCMS and the Air Force, ARRI is developing a total performance measurement/metrics methodology and an investment management multi-attribute decision analysis tool set. Arizona State University is conducting a DARPAsponsored agile pilot project, the Nationwide Electronics Industry Sector Pilot, based on building a business case for agile organizations and virtual companies.
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M. M. Parker and R. J. Benson, Information Economics - Linking Business Performance to Information Technology (Prentice Hall, Englewood Cliffs, 1988) and M.M. Parker, H.E. Trainor, and R.J. Benson, Information Strategy and Economics, (Prentice Hall, Englewood Cliffs, 1989).
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6.0 ACTION PLANS The NGM Project presents a framework for U.S. companies to help meet the challenges of an increasing competitive and dynamic global business environment. Each company has a set of forces driving the degree and priority of NGM Attributes it must acquire. These attributes drive the strategies and resultant imperatives that a company must have to resolve the dilemmas discussed in the NGM Project Summary Report and overcome the barriers discussed in Section 4 of this Imperative paper. Section 5 covers enablers such as best practices to overcome barriers and resolve dilemmas. Depending on its business plan, a company can identify which best practices it can adapt and implement immediately. Wherever applicable, each of the NGM Imperative papers addresses the level of maturity of key enablers, including status of publicly funded pilots, and sets forth recommendations for action. Some proposed actions are conceptual; others focus on specific implementations. Because of significant interdependency among the 10 NGM Imperatives, cross-cutting actions are defined in the Action Plan section of the NGM Project Summary Report. No attempt is made to define a detailed action implementation plan, since any proposed actions are dependent on the specific interests and positions of individual companies and the other stakeholders in the nations manufacturing base. The project description and brief benefits statements are intended to stimulate stakeholder commitment to take action. There are two classes of actions that U.S. industry, working in close partnership with educational institutions and government agencies, should undertake: Many of the enablers described in Section 5 are maturing under the pressures of existing requirements and other sectors of the economy, and with the private and public sector investments. As these enablers mature, U.S. companies should adopt them. Adoption should be done promptly when the company determines that it has the prerequisites in place and when the ramifications of adoption are understood. We recommend establishing an NGM Enablers Clearinghouse (see Section 6.1.) with distribution via the Internet, the NIST Manufacturing Extension Partnership (MEP), universities and colleges, and state and private technology transfer institutions. We also recommend establishing a virtual Center for Teaming in Manufacturing, which would cooperate with and share resources for electronic dissemination with the clearinghouse. This center would be charged with developing change agendas for effective teaming, overseeing activities needed to effect the change, packaging research and experiential results on teaming, and piloting innovative new methods and tools for teaming. People workers and managers are an integral part of Enterprise Integration. The enablers described in this report are intended to be used by workers in the conduct of the NGM Companys operations. Workers and managers will require education to use the maturing enablers in the context of global, competitive manufacturing. We recommend development of a national consensus on the education and training required for Enterprise Integration in the NGM Company and the development of pilot curricula and educational programs at all levels. Some enablers will not bear fruit unless the unresolved issues discussed in Section 3 are resolved. For these, we recommend appropriate R&D efforts, pilot implementations, development of standards and certifications, and changes in law and regulations.
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6.1 Clearinghouse for NGM Enablers The Clearinghouse for NGM Enablers would include: An electronic repository that documents the maturity of the enablers and their characteristics. This may include multimedia documents and presentations on using the characteristics originated by experts within the Clearinghouse, and pointers to relevant, electronically accessible documents and presentations. A network of experts to maintain the documentation of the enablers and characteristics and answer questions posed by users of the Clearinghouse. Interfaces to a set of distribution channels, in addition to the Clearinghouses Web site. These channels should include the NIST MEP, universities and colleges, and state and private consortia and technology transfer institutions. Many technology transfer organizations currently provide knowledge of maturing characteristics; they should be viewed as stakeholders in the Clearinghouse, as should the many companies doing ongoing technology assessments. The objective is to leverage all of these organizations efforts while focusing on characteristics critical to transformation of todays companies to NGM Companies. The benefit to U.S. companies will be a quick, one-stop resource for information to make decisions to adopt enablers of interest, and information on how to implement the enabler. This will accelerate U.S. company transformation on an orderly path with reduced costs and maximum shared benefits. 6.2. Center for Teaming in Manufacturing The Center for Teaming in Manufacturing (CTM) would have three objectives: 1. Disseminate knowledge of teaming to manufacturing companies. The knowledge base would span both interpersonal and interorganizational teaming and collaboration. While the knowledge base would include research study results, much of it would be in the form of lessons learned. The goal would be to package research and experiential results for use by individuals, work units, NGM Companies, and extended enterprises. For this function, the CTM would be virtually collocated with the clearinghouse described in Section 5.1. As part of the dissemination activity, the CTM would prepare courses and presentation materials on teaming that could be used within NGM Companies and by suppliers of education and training. 2. Identify requirements for research, regulatory and legal changes, and pilot implementations of new teaming concepts and tools. This report tentatively identifies: Tools to help establish trust quickly within interpersonal and interorganizational teams Performance management tools and metrics to assess the quality of a teams function and the value of a teams contributions Methodologies and tools for rewarding (or penalizing) team performance Tools to aid in development of multicultural relationships Changes in law, regulations, and contracts (including union contracts) to promote the rapid formation, operation, modification, and dissolution of teams Testbeds for piloting new techniques and tools for teaming under realistic conditions within a manufacturing enterprise. 3. Identify needs for education on teaming and the development of teaming skills and to develop and promulgate solutions to these needs. The needs tentatively identified here include: Multicultural education and skills for academic, corporate, government, and union leaders; for managers, supervisors, and strategic decision-makers; and for individuals and employees Education and skill development in the K-12 schools, at the Associate Degree level, and at higher levels of formal education.
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The CTM will have both immediate and long-term benefits for NGM Companies. In the short term, it will provide the information companies need on best practices in teaming and on strategies for transitioning to an effective team-based culture. The CTM will provide tools and educational products to assist companies in establishing and sustaining teams, and will be a focal point for advocating changes to outdated regulations and laws. 6.3 Education and Training for Enterprise Integration There is a need to develop and disseminate educational modules into all levels of education from K-12, through higher education, company-based education, and lifelong learning to help employees and managers (and prospective employees and managers) to understand and function within the structure, content, and complexity of modern manufacturing enterprises; to understand the global competitive marketplace; to understand the tools and enablers available for their use; to understand and work within the cultural complexity of the physical or virtual workplace, and to understand multicultural diversity within globally extended enterprises. The education needed reaches down into the lower grades, as preparation for children to mature into the entry-level workers industry will need 10 to 20 years from now. Education and training are needed for students in high school and college as they look to enter the workforce in the next 3 to 10 years. Education and training are equally important within the NGM Company, as employees and managers are asked to learn and adapt to new conditions and changing needs; career-long learning for Enterprise Integration will be needed for executives, managers, and all other employees. We recommend establishing a national partnership between industry and education to: Develop a national consensus on the requirements for education and training for manufacturing enterprise education at all levels Develop and pilot curricula and education and training programs that meet the identified needs. Disseminate nationally the curricula and programs that the pilots have shown to be successful. This partnership will provide the NGM Company with a strong pool of prospective employees, employees, managers, and executives in any part of the country where the company chooses to operate with the knowledge and skills to participate in an integrated NGM Enterprise. 6.4 Actions to Resolve Unresolved Issues 6.4.1 Semantics and Integrating Framework for Global Manufacturing Networks An integrating framework, incorporating consensus semantics, is crucial in developing the interfaces needed if manufacturing applications are to be interoperable. There are four significant tasks to resolve the issues related to frameworks for global manufacturing networks: Develop an agreed-to set of semantics Develop an agreed-to integration framework based on the semantics Validate the framework through pilot implementations Define standards for semantics and interfaces that will ensure interoperability across companies that subscribe to the framework. It is suggested that these tasks be accomplished in a phased program: Phase I: Survey existing sets of semantics and frameworks to determine availability of work that can be used directly by NGM Companies, to identify strengths and weaknesses of the existing work, and to identify gaps where new knowledge must be developed, resulting in a development plan for subsequent phases. Phase II: Develop a trial set of semantics and of a trial integration framework.
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Phase III: Pilot implementations of the integration framework, refine the semantics and integration framework, and pilot interfaces incorporating trial standards. Phase IV: Establishment of standards for interfaces based on the refined semantics and integration framework. As noted above, the key to Enterprise Integration lies in clearly defined and understood interfaces within and among the processes of the enterprise, at all levels of granularity. A rigorous set of semantics embodied in a consensus framework is required to define interfaces consistently and rigorously. Such a framework and its consequent interface standards will provide vendors and NGM Companies the targets for integration of manufacturing applications. 6.4.2 Network Certification A task force of business and technical personnel from vendors, users, university laboratories, and government should be formed to establish consensus descriptions of networking services and definitions for networking service levels. The result should be a clear set of service definitions that can be used by manufacturing companies for networking services decisions. Factors should include network robustness (up-time with some specified capacity) and network security. Standards for network certification will give NGM Companies assurance of value in return for communications investments. 6.4.3 Global Regulatory Framework for Manufacturing Networks A joint industry/government task force should examine current international agreements to determine those that are inconsistent with the model of globally distributed NGM Company and extended enterprise operations. The task force should document those agreements that are inconsistent with the model, and provide a set of prioritized recommendations for amendments. A global regulatory framework will simplify the global environment in which the NGM Company operates. 6.4.4 Intellectual Property Rights Agreements Supporting the NGM Company Model It is recognized that the negotiation of intellectual property rights agreements is a slow and tedious process that must be conducted primarily by the federal government. We request that government make the conduct of such negotiations, so that the agreements can support NGM Company and NGM extended enterprise models globally, a high priority. We recommend that an industry panel be established to provide advice on preferred operation of the models and on the difficulties posed by any proposed agreements. 6.4.5 Change Identification and Change Management Tools We recommend establishing a coordinated program to develop and pilot a suite of change identification and change management methods and tools. The change identification tools would include both a predictive mode (e.g., given todays conditions, what are the most likely changes that an NGM would face?) and an acquisition mode (e.g., what in todays conditions indicates that a significant change is in progress and what is that change?) The change management tools would include enterprise-level models, simulations, and metrics to guide changes in operational strategies; methods and tools for the adaptive reorganization of the NGM Company and the extended enterprise; and methods and tools to ensure propagation of new goals to all work units and to help the work units align their activities with the new goals. The program would be accomplished in three phases: Phase I: Survey of methods and tools to determine the availability of work that can be used directly by NGM Companies, identify strengths and weaknesses of the existing work, and identify gaps where new knowledge must be developed, resulting in a development plan for subsequent phases Phase II: Development of trial sets of methods and tools Phase III: Pilot implementations and refinements of trial sets of methods and tools.
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All companies are confronted with change. Many, however, do not see change coming or recognize it until well after it has occurred. Those that do recognize it often lack the knowledge and tools to manage their response. Those that recognize change and manage to respond effectively gain significant competitive advantage. 6.4.6 Conceptual Representation of Manufacturing Enterprise The conceptual representation of manufacturing enterprise will draw heavily on existing projects dealing with concept representations. Some of these have been applied to the manufacturing domain or have representations of manufacturing-related concepts. In the first phase of this effort, existing projects would be surveyed and gaps identified. An implementation phase would not be developed until the first is completed. In the long term, the conceptual representation will provide the basis for refinements to the integration framework and to the semantics discussed in Section 6.4.1. and will provide the common language for representations for different functions and in different languages. 6.4.7 Transparent Interfaces Between Human and Machine Intelligence There are a number of significant tasks to resolve issues related to transparent interfaces between humans and machines; we must: Have an adequate suite of models of cognition and learning, as influenced by culture and language so that we can design the machine side of the interface Develop an agreed set of look-and-feel practices backed by technology that enables the interface to be automatically tailored to a person starting to use or control a machine Have multi-lingual (including machine translation) and multicultural capabilities built into interfaces Have natural (graphic, natural language, procedural, rule-based) programming capabilities built into the interface to support transparent programming Have easily used filters to reduce knowledge flow through the interface to that minimum required by a given manufacturing task Develop full-function interfaces (e.g., virtual reality environments) that allow humans to use all of their sensory capabilities Pilot full-function (multi-sensory, multicultural, multi-lingual) interfaces in realistic manufacturing environments. It is suggested that these tasks be accomplished in a phased project: Phase I: Survey existing user interface technologies and implementations to determine the availability of work that can be used directly by NGM Companies, identify strengths and weaknesses of the existing work, and identify gaps where new knowledge must be developed, resulting in a development plan for subsequent phases Phase IIa: Research and development to design of a suite of models of cognition and learning suitable for machine instantiation Phase IIb: Using preliminary results from Phase I and Phase IIa, development of a trial set of interface technologies and tools Phase IIc: Development and operation of a testbed for pilot implementations Phase III: Pilot implementations of the trial set of technologies and tools, and refinement of the technologies Phase IV: Establishment of standards based on the refined semantics and integration framework interfaces. Transparent interfaces will optimize the NGM Companys investments in human intelligence and in machine intelligence by minimizing the overhead costs in integrating people and machines into effective systems.
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7.0 SOURCES
1. 2. 3. 4. 5. 6. 7. 8. 9. Banki, I.S., ed. Dictionary of Administration and Management. Los Angeles, CA, Systems Research Institute, 1986. Banks, Robert L. and Wheelwright, Steven C. Operations vs. Strategy: Trading Tomorrow for Today; Harvard Business Review, May-June 1979, pp. 112-120. Berlinger, Callie and Brimson, James A. Cost Management for Todays Advanced Manufacturing The CAM-I Conceptual Design ; Harvard Business School Press, 1988. Bertain, Leonard and Hales, Lee. A Program Guide for CIM Implementation; Society of Manufacturing Engineers, 1987. Block, P. Stewardship. 1993 Burrus, D. with Gittines, R. Technotrends: Twenty-four Technologies that will Revolutionize our Lives; Harper Business, 1993. Chesbrough, H.W. and D.J. Teece. When is Virtual Virtuous? Organizing for Innovation; Harvard Business Review 74(1), pp. 65-73, 1996. Conkol, Gary K. The Role of CAD/CAM in CIM; Society of Manufacturing Engineers, 1990. Conkol, Gary K. The Role of CAD/CAM in CIM Part II; Society of Manufacturing Engineers, 1991.
10. Consortium for Advanced Manufacturing International, Cost Management for Todays Advanced Manufacturing; CAM-I, 1988. 11. Consortium for Advanced Manufacturing International, Competitive Integrated Enterprise Program: Examples of CIE in Practice, Volume III; CAM-I, 1993. 12. Consortium for Advanced Manufacturing International, Competitive Integrated Enterprise Program: Executive Perspective, Volume I; CAM-I, 1993. 13. Cooper, Robin, Kaplan, Robert S., Maisel, Lawrence S., Morrissey, Eileen and Oehm, Ronald M. Implementing Activity-Based-Cost Management: Moving From Analysis to Action; Institute of Management Accounts, 1992. 14. Cooper, Robin and Chew, W. Bruce. Control Tomorrows Costs Through Todays Designs; Harvard Business Review, Jan-Feb. 1996, pp. 88-97. 15. Davis, S. 2020 Vision. 1991. 16. Duncan, William L. Manufacturing 2000; AMACOM, 1994. 17. Gartner Group. ERP Vendors; Gartner Group, 1995. 18. Gartner Group. CIM Scenario; Gartner Group, 1995. 19. Goldman, S., Nagel, R., and Preiss, K. Agile Competitors and Virtual Organizations: Strategies for Enriching the Customer; Van Nostrand Reinhold, 1994. 20. Hall, B. Values Shift ; Twinlights Publishers, 1995. 21. Hayes, Robert H. and Pisano, Gary P. Beyond World-Class: The New Manufacturing Strategy, Harvard Business Review; Jan-Feb. 1994, pp. 77-86. 22. Helgesen, S. The Web of Inclusion: A New Architecture for Building Great Organizations; Doubleday Currency, 1995. 23. Hunt, V. Daniel, ed. Dictionary of Advanced Manufacturing Technology; New York, NY, Elsevier Science Publishing Co., Inc., 1987. 24. Illingworth, V. and E.L. Glaser, et al., eds. Dictionary of Computing; New York, Oxford University Press, 1986. 25. John, Vernon, ed. Macmillan Dictionary of Materials and Manufacturing; London, The Macmillan Press Ltd., 1990. 26. Jordan, J.A., Jr., The Agile Skill Sets; CAM-I, 1994. 27. Kaplan, R.S. and D.P. Norton. Using the Balanced Scorecard as a Strategic Management System; Harvard Business Review. 74: pp. 75-85, 1996.
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28. Khosla, P.K. Tools for Design, Manufacturing, and Integration; NSTC Subcommittee on Manufacturing Infrastructure, 1995. 29. Korah, John K. Enterprise Information Exchange (EIX) Issues in the CIM Environment; Society of Manufacturing Engineers, 1991. 30. Krag, William. Best Practices for Process Design; Society of Manufacturing Engineers, 1995. 31. Liu, David. From Communication Fundamentals to the Information Superway A Primer; Society of Manufacturing Engineers, 1995. 32. McFarlan, F. W. and R. L. Nolan. How to Manage an IT Outsourcing Alliance; Sloan Management Review 36(2), pp. 9-23, 1995. 33. McGrath, Michael E. and Hoole, Richard W. Manufacturings New Economies of Scale; Harvard Business Review May-June 1992, pp 94-102. 34. Miller, John A. Implementing Activity-Based Management in Daily Operations; John Wiley & Sons, Inc., 1996. 35. Nonaka, I., and Takeuchi, H. The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation; Oxford University Press, 1995. 36. Parker, Marilyn M., and Benson, Robert J. Information Economics: Linking Business Performance to Information Technology; Prentice Hall, 1988. 37. Parker, Marilyn M., Trainor, H. Edgar, and Benson, Robert J. Information Strategy and Economics; Prentice Hall, 1989. 38. Penning, David C. Computer Networking Practices in Small Manufacturing Enterprises; Society of Manufacturing Engineers, 1994. 39. Petrie Jr., Charles J. Enterprise Integration Modeling - Proceedings of First International Co nference; MIT Press, 1992. 40. Rosenberg, J. M., ed. Dictionary of Business and Management , Business Dictionary Series; New York, John Wiley & Sons, Inc., 1993. 41. Savage, Charles M. The Dawn of the Knowledge Era, in OR/MS Today, Dec. 1994. 42. Savage, Charles M. Fifth Generation Management, Rev. Ed.: Co-creating through Virtual Enterprising, Dynamic Teaming and Knowledge Networking; Butterworth-Heinemann, 1996 43. Scaringella, S. Enterprise Performance Assessment Tool Strategic Level; Bethlehem, PA, Agility Forum, 1995. 44. Scaringella, S. and P. Erickson. Enterprise Integration Assessment Tool, Agility Forum, 1996. 45. Shrensker, Warren L. CIM- Computer-Integrated-Manufacturing A Working Definition; Society of Manufacturing Engineers, 1990. 46. Sink, D. Scott. Productivity Management: Planning, Measurement and Evaluation, Control and Improvement; John Wiley & Sons, 1985. 47. Sink, D. Scott and Tuttle, Thomas C. Managing Quality and Productivity in Aerospace and Defense; Defense Systems Management College, 1988. 48. Sink, D. Scott and Tuttle, Thomas C. Planning and Measurement in Your Organization of the Future; Industrial Engineering & Management Press, 1989. 49. Spencer, D.D., ed. Computer Dictionary . Ormond Beach, FL, Camelot Publishing Company, 1992. 50. Suarez, Fernando F., Cusumano, Michael A., and Fine, Charles H. An Empirical Study of Flexibility in Manufacturing; Sloan Management Review, Fall 1995, pp 25-32. 51. Thacker, Robert M. A New CIM Model A Blueprint for the Computer-Integrated-Manufacturing Enterprise; Society of Manufacturing Engineers, 1989. 52. Warnecke, H.J. The Fractal Company Springer Verlag, 1993. 53. Wheatley, M. Leadership and the New Science: Learning about Organization from an Orderly Universe; BerrettKoehler, 1992.
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8.0 GLOSSARY artificial intelligence (AI) A group of technologies that attempt to emulate certain aspects of human behavior, such as reasoning and communicating, as well as to mimic biological senses, including seeing and hearing. Specific technologies include expert systems (also called knowledge-based systems), natural language, neural networks, machine translation and speech recognition. AI is the branch of computer science that is concerned with developing computer systems capable of simulating human reasoning and sensation. AI involves using computers and software that, like the human mind, use stored knowledge to make decisions involving judgment or ambiguity. authentication A process for verifying the correctness of a piece of data . autonomous agents In object-oriented programming, an object that can both operate upon other objects and be operated upon by other objects. An agent is usually created to do some work on behalf of an actor or another agent. bandwidth In data communications, difference between the highest and lowest frequencies of a band. Used as a measure of the capacity of a communication channel, expressed in bits per second, or bauds. barrier An inhibitor to realizing the transformation of todays companies into next-generation manufacturing companies BPR Business Process Re-engineering is the redesign and implementation of business processes to reduce costs, process time chaos A mathematical science which, contrary to its name, reveals an orderly pattern in the universe. Chaos is a branch of complexity theory in which simple elements (often called fractals), that are self-similar and selforganizing, combine into very complicated systems. client/server systems A relationship between machines in a communications network. The client is the requesting machine; the server is the supplying machine. complexity theory The mathematical representation of complicated systems. Complexity theory is being used to describe the behavior of biological, economic, and manufacturing systems and to provide guidance on the architecture for cost-effective systems. core competencies The value-adding activities on which a company chooses to build its business. Typically these are the activities it does best or that provide it with a competitive advantage. EDI Electronic Data Interchange is the use of communications techniques to transmit documents electronically. EDI relies primarily on the development of standard formats for various business documents such as invoices, purchase orders, and acknowledgments. electronic commerce The conduct of commercial transactions electronically, typically using a public network such as the Internet emergent behavior The behavior, over time, of combinations of simple elements as they follow simple rules for self-organization. According to complexity theory, emergent behaviors of large assemblies of simple elements often exhibit unexpected behaviors. enabler Facilitators allowing the next-generation manufacturing company to reach a specific strategic objective and therefore the NGM vision for the company. encryption The process of coding, or encrypting, any data, in which a specific code or key is required to restore the original data. The process of encoding communications data. expert systems Interactive computer programs that help users with problems that would otherwise require the assistance of human experts. Expert systems capture knowledge in rules that can be communicated to oth-
40
ers as advise or solutions. Program that presents the computer as an expert on some topic. The programs often simulate the reasoning process used by human experts in certain well-defined fields. fourth generation computer language A user-oriented language that makes it possible to develop programs with fewer commands than those needed for older procedural languages. A non-procedural language. Also called a 4GL language. fractals An object (or set of points, curves, or patterns) which exhibits increasing detail with increasing magnification. Deals with curves and surfaces with nonintegral, or fractional dimension. In computer graphics applications, this relates to a technique for obtaining a degree of complexity analogous to that in nature from a handful of data points; a method of describing real-world surfaces. Fractals can be used for stunning graphic effects, and can approximate the randomness of nature. The term fractal was coined by mathematician Benoit Mandelbrot in 1975. groupware Software that is designed for use in a network and serve a group of users that work on a related project. holography Method of storing data by making a multidimensional photograph on a storage medium. imperative A set of related actions todays companies should take as they transform themselves into nextgeneration manufacturing companies information technology Merging of computing and high-speed communications links carrying data, sound, and video. interoperability The ability of a user or manufacturing application running on one networked computer system to share results in a timely, accurate, a usable way with users and manufacturing applications running on any other networked computer system. knowledge systems A large body of knowledge in the form of rules and facts along with an inference mechanism that can be used to solve problems. An expert system. lean manufacturing The manufacturing paradigm refined by the Japanese that seeks to continuously reduce the costs of manufacturing, especially by reducing overhead costs natural language 1) The fifth generation of programming languages. These languages use human languages such as English, German or French to give people a more natural connection with computers. 2) Ordinary human language; unlike precisely defined computer languages, it is often ambiguous and is thus interpreted differently by different hearers. neural network 1) A computer simulation of the brain. 2) Self-organizing systems of simple interconnected processing units which possess a learning rule and are capable of learning. NGM Extended Enterprise Includes the community of companies that collaborate to fulfill stakeholders needs. This includes both flexible partnerships in a value chain and/or a constellation network. NGM Imperative NGM Imperatives are the things that must be done if the manufacturing industry in the United States is going to thrive in the early 21st Century. non-procedural Language that states what task is to be accomplished but does not state the steps needed to accomplish it. For example, the computer language for interacting with a database. It specifies what the user wants to know rather than the steps needed to produce the information, which are worked out by the computer. object technology A programming technology that is generally more flexible and adaptable than standard programming. Object-oriented programming lets you create procedures about objects whose exact type is not known until run time. A level of computer abstraction beyond that of procedures and data. Object orientation involves thinking about the world as a set of entities or objects that are related to and communicate with one another. open architecture 1) A computer or operating system design for which detailed specifications are published by the manufacturer, allowing others to produce compatible hardware and software. Personal computer de-
41
sign that allows additional circuit boards to be inserted in expansion slots inside the computer to support addons. 2) An architecture that allows integration with other languages, conventional software programs, and graphics user interfaces. open systems A vendor-independent system that is designed to interconnect with a variety of products that are commonly available. product life cycle The six stages of market acceptance of any goods: pioneering, growth, maturity, saturation, decline, and abandonment. semantic net A knowledge representation scheme that organizes human knowledge into a web-like structure consisting of nodes objects, concepts and events connected by links that specify the nature of the connections. systems thinking An inclusive, holistic, way of thinking that broadens the focus of attention from narrow problem-solving to the solution of problems with consideration of the inherently complex environment that surrounds the problem. third generation computer language A procedural programming language consisting of a set of statements that control the operations of a computer. A means for computer users to provide a series of instructions for a computer to follow. user interface The means of communication between a human user and a computer system, referring in particular to the use of input/output devices with supporting software. Examples include the use of a mouse with bit-mapped graphics and the use of windows. voice recognition System designed to recognize and understand the voice and vocabulary of the user.
42

January 1997
Prepared By: The NGM Roadmapping Task Force
Copyright 1997 Agility Forum, Leaders for Manufacturing, and Technologies Enabling Agile Manufacturing

All rights reserved. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval systems, without permission in writing from the publisher.
CONTRIBUTORS Dudley Caswell, Enterprise Innovations, Team Leader Douglas Marks, D.F. Marks Marketing Communications, Lead Author Bill Brosey, Oak Ridge Centers for Manufacturing Technologies Richard Engwall, R.L. Engwall & Associates Paul Erickson, Sandia National Laboratories Paul Gallagher, Massachusetts Institute of Technology Steve Ricketts, National Center for Manufacturing Sciences Richard Neal, Technologies Enabling Agile Manufacturing Robert Boykin, Consortium for Advanced Manufacturing - International
ii
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CONTENTS Introduction .................................................................................................................................................. 1 Bibliography of Documents Reviewed .......................................................................................................... 3 PART 1 CROSS-INDUSTRY SUMMARY 1.0 Vision...................................................................................................................................................... 9 2.0 Goals, Needs, and Drivers..................................................................................................................... 11 2.1 Goals .............................................................................................................................................. 11 2.2 Needs ............................................................................................................................................. 13 2.3 Drivers............................................................................................................................................ 14 3.0 Barriers.................................................................................................................................................. 16 3.1 Near Term 0 to 5 Years................................................................................................................ 16 3.2 Mid Term (5 to 10 Years) and Long Term (10 to 15 Years)............................................................ 19 4.0 Enablers ................................................................................................................................................ 20 4.1 Technology Enablers....................................................................................................................... 20 4.1.1 Near Term 0 to 5 Years .................................................................................................... 20 4.1.2 Mid Term 5 to 10 Years ................................................................................................... 26 4.1.3 Long Term 10 to 15 Years................................................................................................ 27 4.2 Business Practice Enablers............................................................................................................... 28 4.2.1 Near Term 0 to 5 Years .................................................................................................... 28 4.2.2 Mid Term (5 to 10 Years) and Long Term (10 to 15 Years) ................................................ 30 4.3 Cultural Enablers............................................................................................................................ 30 4.3.1 Near Term 0 to 5 Years .................................................................................................... 30 4.3.2 Mid Term 5 to 10 Years ................................................................................................... 30 4.3.3 Long Term 10 to 15 Years................................................................................................ 30 4.4 Environmental Enablers.................................................................................................................. 31 4.4.1 Near Term 0 to 5 Years .................................................................................................... 31 4.4.2 Mid Term 5 to 10 Years ................................................................................................... 31 4.4.3 Long Term 10 to 15 Years................................................................................................ 31 PART 2 INDUSTRY SUMMARIES 1.0 Aerospace .............................................................................................................................................. 33 1.1 Vision............................................................................................................................................. 33 1.2 Goals, Needs, and Drivers............................................................................................................... 33 1.3 Barriers ........................................................................................................................................... 36 1.4 Enablers .......................................................................................................................................... 37 2.0 Agricultural ........................................................................................................................................... 39 2.1 Vision............................................................................................................................................. 39 2.2 Goals, Needs, and Drivers............................................................................................................... 39 2.3 Barriers ........................................................................................................................................... 40 2.4 Enablers .......................................................................................................................................... 40 3.0 Automotive ........................................................................................................................................... 41 3.1 Vision............................................................................................................................................. 41 3.2 Goals, Needs, and Drivers............................................................................................................... 41 3.3 Barriers ........................................................................................................................................... 42 3.4 Enablers .......................................................................................................................................... 42
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CONTENTS (Continued) 4.0 Biomedical ............................................................................................................................................ 44 4.1 Vision............................................................................................................................................. 44 4.2 Goals, Needs, and Drivers............................................................................................................... 44 4.3 Barriers ........................................................................................................................................... 44 4.4 Enablers .......................................................................................................................................... 44 5.0 Chemical............................................................................................................................................... 45 5.1 Vision............................................................................................................................................. 45 5.2 Goals, Needs, and Drivers............................................................................................................... 45 5.3 Barriers ........................................................................................................................................... 46 5.4 Technology Enablers....................................................................................................................... 46 5.5 Business Practice Enablers............................................................................................................... 47 5.6 Cultural Enablers............................................................................................................................ 47 5.7 Environmental Enablers.................................................................................................................. 47 6.0 Construction......................................................................................................................................... 48 6.1 Vision............................................................................................................................................. 48 6.2 Goals, Needs, and Drivers............................................................................................................... 48 6.3 Barriers ........................................................................................................................................... 49 6.4 Enablers .......................................................................................................................................... 49 7.0 Electronics............................................................................................................................................. 50 7.1 Vision............................................................................................................................................. 50 7.2 Goals, Needs, and Drivers............................................................................................................... 50 7.3 Barriers ........................................................................................................................................... 53 7.4 Enablers .......................................................................................................................................... 54 8.0 General Industry ................................................................................................................................... 60 8.1 Vision............................................................................................................................................. 60 8.2 Goals, Needs, and Drivers............................................................................................................... 60 8.3 Barriers ........................................................................................................................................... 65 8.4 Enablers .......................................................................................................................................... 66 9.0 Information Systems ............................................................................................................................. 74 9.1 Vision............................................................................................................................................. 74 9.2 Goals, Needs, and Drivers............................................................................................................... 74 9.3 Barriers ........................................................................................................................................... 75 9.4 Enablers .......................................................................................................................................... 76 10.0 Material Processing ............................................................................................................................. 78 10.1 Vision........................................................................................................................................ 78 10.2 Goals, Needs, and Drivers ......................................................................................................... 78 10.3 Barriers ...................................................................................................................................... 81 10.4 Enablers..................................................................................................................................... 82 11.0 Machine Tools .................................................................................................................................... 84 11.1 Vision........................................................................................................................................ 84 11.2 Goals, Needs, and Drivers ......................................................................................................... 84 11.3 Barriers ...................................................................................................................................... 85 11.4 Enablers..................................................................................................................................... 85 12.0 Textiles/Apparel .................................................................................................................................. 86 12.1 Vision........................................................................................................................................ 86 12.2 Goals, Needs, and Drivers ......................................................................................................... 86 12.3 Barriers ...................................................................................................................................... 89 12.4 Enablers..................................................................................................................................... 89
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CONTENTS (Continued) 13.0 Transportation .................................................................................................................................... 91 13.1 Vision........................................................................................................................................ 91 13.2 Goals, Needs, and Drivers ......................................................................................................... 91 13.3 Barriers ...................................................................................................................................... 91 13.4 Enablers..................................................................................................................................... 91
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INTRODUCTION The NGM Project The Next-Generation Manufacturing (NGM) project is an industry-driven and industry-led effort, supported by the National Science Foundation and building on other national manufacturing initiatives, to develop a broadly accepted model for successful NGM enterprises, and a framework for action that individual companies can use to help plan, achieve, and sustain world-class status. Through the collaborative efforts of 10 national industrial associations with manufacturing as their central focus, NGM is delivering a set of action plans defining cross-cutting enabling technologies and practices that address the barriers to achieving NextGeneration Manufacturing. These plans include both delineation of current best practices and near-term actions, as well as long-term research and development activities to move to the next generation. The NGM Roadmapping Effort In support of the NGM effort, a Roadmapping Task Force was formed to research available industry and government documents with the express purpose of providing a knowledge benchmark of existing U.S. roadmaps and action plans. The task force members were selected from NGM project contributors on the basis of their breadth and depth of experience and ability to develop an unbiased picture of currently documented goals, needs, drivers, and strategies for manufacturing evolution. It is important to stress that this roadmap digest in itself is not an action plan for industry, but a true documentation of findings, without editorials or additions. It is a synopsis of previously published material, and is not intended to provide novel concepts or define priorities, but to be a resource for individuals interested in follow-on efforts to implement NGM concepts and develop the enabling technologies, practices, and business processes outlined in the NGM Project Report. Methodology More than 150 documents from industry, government, and academia were collected from NGMs participating organizations and through the teams knowledge and research. Roadmap documents of a number of industries and federal agencies, as well as other forward-looking manufacturing literature, were reviewed to synthesize current thinking about technology and business practice needs. These documents have a primary focus on manufacturing, and were consolidated into a common framework to provide a picture of the current state of the nations roadmapping efforts. Two tenets of document selection for review were timeliness and relevancy, so we focused on documents that had impact on manufacturing, generally not published prior to 1991 except when a particular document had significant impact. There was much data to be compiled, and while some information was readily available, some was proprietary and thus could not be included. A broad, representative view of all obtainable material was compiled, keeping in mind that our job was to document what we found without adding an individual interpretation. The existing visions, roadmaps, and action plans take a variety of forms. Groupings around industry sectors, products, and processes are prominent, and categories for grouping within these major "approach options" vary. A common framework was created where all of the diverse input was grouped and compiled first by industry sector, and then sorted by standard roadmap elements (goals, needs, drivers, etc.). This complied information was then sifted and edited to produce the final digest document. The roadmap framework addresses 13 industry sectors: Agricultural Products, Aerospace, Automotive, Biotechnology, Chemical, Construction, Electronics, Information Systems, Machine Tools, Materials Processing, Textiles & Apparel, Transportation, and General. These industry sectors are addressed first through a framework of the major elements of a roadmap: Vision, Goals, Needs, Drivers, Barriers, and Enablers [Technology Enablers (product, process, infrastructure), Business Practice Enablers, Cultural Enablers, and Environmental Enablers], which are put into a timeframe context as best possible. Where no time frame was specified in the source documents, all information was put into the near-term category.
Findings The majority of the documents reviewed were tightly focused on their specific industries. Some of the documents focused primarily on identifying issues impacting the competitiveness of the industry, while others offered specific goals and metrics as targets for improving performance and capability. Few documents provided future specifics. There were many gaps, and often the documents defined no extended timeline for their efforts. Due to wide variance in approaches to roadmapping in the documents reviewed, and because the summaries are synthesized from many documents, the team did not focus on matching specific goals, needs, drivers, or enablers to barriers. There are many messages and themes that cut across many of the documents and virtually all industry sectors. Some of the most frequently listed drivers and needs include: Drivers Increasing rate of technology change Increasing level of knowledge intensity in products, technology, and the workforce Increasing global competition attendant with globalization of the world economy Increased information availability Increasing workforce diversity.
Needs Decreased time to market Greater understanding of, and responsiveness to, customer needs Greater focus on leverage of private and federal investment in manufacturing R&D to offset declining levels of investment Technology advances to improve manufacturing capabilities and performance Streamlining of government regulations More effective partnerships between government, industry, and academia Greater consideration of long-term impacts and needs in short-term decision processes Integrated information infrastructure enablers Higher-skilled workers with greater diversity of skills Alignment of visions to improve impact of investments Effective metrics for performance measurement Increased use of and adherence to standards Understanding of cultural and diversity issues to address customer and workforce needs.
NGM ROADMAP TEAM BIBLIOGRAPHY OF DOCUMENTS REVIEWED The NGM Roadmapping Task Force reviewed more than 150 industry and government source documents in the course of its analysis of existing roadmaps. The documents listed below and on the following pages are not all-inclusive, but represent the best information available at the time of the study effort. Other relevant documents exist (primarily in the form of strategic plans developed by particular corporations or associations) but are not included due to their proprietary or otherwise sensitive nature.
Title 1993 Public Policy Agenda 1997 Defense Technology Area Plan Publisher American Electronics Association U.S. Department of Defense Date Jan 1993 Apr 1996 Industries Electronics Construction Materials Processing Machine Tools General Electronics Aerospace Aerospace Materials Processing Electronics Aerospace
21st Century Manufacturing Enterprise Strategy (Vol. 1 & 2) A Detailed Technology Roadmap for Superconductivity A Pilot Program for Sustainment A Radical Reform of the Defense Acquisition System A Technology Vision and Research Agenda for Americas Glass Industry Accelerating the Use of Commercial Integrated Circuits in Military Systems Advanced Manufacturing The Role of Manufacturing Science & Technology (MS&T) in the New Defense Acquisition Environment Advanced Manufacturing and Precision Engineering Technical Area Coordinating Team Strategic Plan For FY94
Agile Manufacturing Enterprise Forum, Iacocca Institute, Lehigh University National Center for Advanced Technologies (NCAT) Carnegie Commission on Science, Technology and Government DOE Technology Transfer Directorate with selected industry executives NCAT Multi-Use Manufacturing Work Panel American Defense Preparedness Association
Nov 1991 May 1992 Nov 1995 Dec 1992 Jan 1995 Aug 1995 Jun 1994
DOE Defense Programs
Jul 1993
Advanced Manufacturing Technology (AMT) The FY94 Federal Program in MS&T Advanced Manufacturing Technology Initiative U.S. Electronics Industry Priorities Advanced Materials Technology and Industrial Base: An Analysis and Assessment of Specialty Metals and Advanced Composites Advanced Metallic Structures Technology Development Plan Aeronautics Materials and Manufacturing Technologies (AMMT) Working Group Report After the Cold War: The U.S. Aerospace Industry in the International Marketplace (Part 3) After the Cold War: The U.S. Aerospace Industry in the International Marketplace (Part 1) After the Cold War: The U.S. Aerospace Industry in the International Marketplace (Part 2) An Approach To Process Maturity
Committee on Industrial & Technology of the Federal Coordinating Committee for Science, Engineering, & Technology (FCCSET) American Electronics Association Office of the Under Secretary of Defense (Acquisition and Technology) supported by the Institute for Defense Analysis National Center for Advanced Technologies National Center for Advanced Technologies Aerospace Industries Association (AIA); Aerospace Research Center AIA; Aerospace Research Center AIA; Aerospace Research Center National Center for Advanced Technologies
Aug 1993
Aerospace Automotive Electronics Machine Tools Textiles Aerospace
Jan 1993 Jan 1996
Electronics Materials Processing
Aug 1993 Aug 1994 Apr 1995 Nov 1993 Sep 1994 Jun 1996
Materials Processing Aerospace Materials Processing Aerospace Aerospace Aerospace Aerospace
An Assessment of the MS&T Program in Todays Defense Manufacturing Environment Army Research Laboratory Annual Review 1994/95 Beyond 2000: A Vision for the American Metalcasting Industry Breaking The Mold Forging a Common Defense Manufacturing Vision Building Future Security: Strategies for Restructuring the Defense Technology and Industrial Base Capacity: A Managers Primer CIM - ERP Vendor Guide 1995, Part 1 Committee on Information & Communication Committee On Transportation R&D Computer Integrated Enterprise Guidelines and Methodologies Computer Integrated Operations Strategic Agenda Crafting a Common Manufacturing R&D Agenda Critical Technologies Update 1994
National Center for Advanced Technologies Army Research Laboratory DOE Technology Transfer Directorate National Research Council National Academy Press U.S. Congress, Office of Technology Assessment CAM-I, Edited by Thomas Klammer Gartner Group Advisory Services National Science & Technology Council Consortium for Advanced Manufacturing International National Center for Manufacturing Sciences (NCMS) National Association of Manufacturers Council on Competitiveness
Apr 1994 Oct 1994 Sep 1995 1993 Jun 1992 1995 Dec 1995 Mar 1995 1993 1996 Aug 1992 Sep 1994
Aerospace Aerospace Materials Materials Processing General Aerospace General General Information Systems Transportation General Information Systems General Aerospace Automotive Biomedical Chemical Electronics Materials Processing Electronics General General Automotive Automotive Automotive Automotive Automotive Electronics Electronics General General Information Systems
Defense Electronics Essential Technology Needs National Center for Advanced Technologies Defense Manufacturing Council/Industry Affordability National Center for Advanced Technologies Task Force Defense Manufacturing Enterprise Strategy Office of the Under Secretary of Defense for Acquisition Delphi I Forecast Materials University of Michigan Delphi VII Forecast Marketing University of Michigan Delphi VII Forecast of North American Automotive University of Michigan Industry of Technology Devine Providence At Ford Institutional Investor Driving Americas Renaissance Transportation Research Institute, University of Michigan Electronics 92: Strategic Alliance Ernst & Young Outlook Electronics 93: The New Global Reality Ernst & Young Engineering in the Manufacturing Process Office of the Under Secretary of Defense for Acquisition Environmental Technology Initiative FY1994 U.S. Environmental Protection Agency Program Plan Evolving the High Performance Computing and Computer Science and Telecommunications Communications Initiative to Support the Nations Board Information Infrastructure Factories for the Future: 1990 International Boston University, Waseda University, INSEAD Manufacturing Futures Survey Fords Leap at the Future Fortune Fords New Look Industry Week Foreign Electronics Technology Assessment Electronics Subcommittee of the NSTC NEMI Future Vision: The 189 Most Important Trends of Research Alert the 1990s
May 1994 Mar 1995 Sep 1993 Feb 1994 Feb 1994 Feb 1994 Mar 1995 1995 1992 Nov 1993 Mar 1993 1994 Feb 1995
1990 Sep 1995 Jan 1995 Dec 1994
General Automotive Automotive Electronics
FY93 Advanced Materials & Processing S&T Program FY94 Advanced Materials & Processing S&T Program FY97 Defense Technology Area Plan for Chemical, Biological Defense and Nuclear FY96 and FY95 Materials & Processes Technology Area Plans Gaining the Competitive Edge: Critical Issues in Science and Engineering Technician Education Industrys Future: Changing Patterns of Industrial Research Information Superhighway: An Overview of Technology Challenges Information Technology for Manufacturing Intelligent Manufacturing Systems (IMS) Keeping the U.S. Computer Industry Competitive: Systems Integration Laboratory Infrastructure Capabilities Study: Phase I Report Long-Term Outlook for the Electronics Industry Losing Airspeed and Attitude: The Aircraft Sector in Distress Machine That Changed the World Made In America Management of Technology: The Hidden Competitive Advantage Manufacturing 21 Report: The Future of Japanese Manufacturing Manufacturing Education for the 21st Century: Curricula 2002 Report Manufacturing Research: Future Directions in Materials Processing, Materials & Product Design, and Integrated Systems Materials Science and Engineering for the 1990s: Maintaining Competitiveness in the Age of Materials
FCCSET Committee on Industry and Technology FCCSET Committee on Industry and Technology U.S. Department of Defense Air Force Material Command, Directorate of Science & Technology National Science Foundation American Chemical Society U.S. General Accounting Office
Jul 1992 Jul 1993 Apr 1996 Aug 1995, May 1994 Jul 1993 1994 Jan 1995
Materials Processing Materials Processing Biomedical Materials Processing General General Information Systems Information Systems Information Systems Information Systems Materials Processing Electronics Aerospace Automotive General General General General Materials Processing
U.S. Dept. of Commerce Computer Science & Telecommunications Board Institute for Defense Analysis Japanese Electronic Industry Development Association (translated by NCMS) Defense Policy Advisory Committee on Trade Womack, Jones, Roos MIT Commission on Industrial Productivity National Research Council/National Academy Press Association for Manufacturing Excellence, Robert Hall Society of Manufacturing Engineers Wright Laboratory/ Materials Directorate
1994 1992 Nov 1994 Mar 1990 Sep 1993 1990 1989 1987 1990 Sep 1994 Jan 1989
National Research Council
1989
Microelectromechanical Systems (MEMS): A DoD Dual-Use Technology Industrial Assessment Final Report Multi-Assn Electronic Research, Development, and Engineering Showstoppers National Advanced Composites Strategic Plan National Advanced Sensors Strategic Plan National Critical Technologies Report National Electronics Manufacturing Initiative (NEMI) National Ultra-Reliable Electronic Systems Strategic Plan NCMS Collaborative Manufacturing Agenda New Thinking and American Defense Technology
DoD Dual-Use Technology Office under Director, Defense Research and Engineering Electronic Industry Association National Center for Advanced Technologies National Center for Advanced Technologies Office of Science and Technology Policy NEMI Consortium NEMI Secretariat, Bob Klaiber National Center for Advanced Technologies National Center for Manufacturing Sciences Carnegie Commission on Science, Technology & Government
Dec 1995
Aerospace Biomedical Chemical Electronics Materials Processing Electronics
Jul 1993 Sep 1991 Dec 1992 Mar 1995 Oct 1995 Apr 1992 Apr 1996 Aug 1990
Electronics Materials Processing Electronics General Electronics Electronics Machine Tools Aerospace
Next Generation Manufacturing Enterprise: Research and Development Issues Optoelectronic Technology Roadmap Conclusions and Recommendations Partnership for a New Generation of Vehicles Program Plan Partnership for the Future: Aluminum Industry Perspectives on the National Information Infrastructure Pervasive Technology Needs Priority-Setting and Strategic Sourcing in the Naval RD&T Infrastructure Reports of the Subcouncils Roadmap for Results: Trade Policy, Technology, and American Competitiveness Science, Technology and Government for a Changing World Sector Study for Army Material Command: Communications/Electronics Semiconductor Industry Association (SIA) Semiconductor Technology Roadmap Semiconductor Technology Workshop Conclusions Soft Goods Industry Strategic Brainstorming Steel: A National Resource for the Future Strategic Planning Document 1995 Strategy 2000: An Electronics Industrial Baseline Analysis Taguchi On Robust Technology Development Target Costing: The Next Frontier in Strategic Cost Management Technology and the American Economic Transition Technology for Affordability A Report on the Activities of the NCAT Working Groups Technology for Americas Economic Growth, A New Direction to Build Economic Strength Technology Vision 2020 Textiles Technology Through the AMTEX Partnership: A Technology Roadmap The Competitive Status of the U.S. Electronics Sector From Materials To Systems The National Technology Roadmap for Electronic Interconnections Toward a U.S. Technology Strategy: Enhancing Manufacturing Competitiveness U.S. EPA Environmental Technology Initiative: FY1994 Program Plan U.S. Feast Using the Balanced Scorecard as a Strategic Management System Vision for a 21st Century Information Infrastructure Vision in Manufacturing: Planning for the Future, Vol. 1: Critical Success Factors for Global Competition
NGM Project Optoelectronics Industry Development Association PNGV Aluminum Association, Inc. Computer Systems Policy Project Semiconductor Industry Association National Defense Research Institute Competitiveness Policy Council Council on Competitiveness Carnegie Commission on Science, Technology, and Government Electronics Industry Association Semiconductor Industry Association Semiconductor Industry Association Textiles/Clothing Technology Corp. DOE Technology Transfer Directorate NSTC, Committee on Civilian Industrial Technology Westinghouse Electronic Systems American Society of Mechanical Engineers CAM-I, Shahid Ansari, Jan Bell U.S. Congress, Office of Technology Assessment National Center for Advanced Technologies White House The U.S. Chemical Industry AMTEX Program Office Pacific Northwest National Laboratory Dept. of Commerce Industrial Trade Administration Institute for Interconnecting & Packaging Electronic Circuits Manufacturing Forum, National Academy of Engineering, National Academy of Sciences U.S. Environmental Protection Agency Institute for Trade Harvard Business Review Council on Competitiveness Deloitte & Touche Tohmatsu International Manufacturing Consulting Services
May 1994 1994 1995 Mar 1996 1993 Jul 1993 1995 Mar 1993 1993 Apr 1993 May 1992 Jan 1993 1993 Feb 1995 May 1995 Mar 1995 Jun 1991 1993 1996 May 1988 Jan 1994 Feb 1993 Dec 1996 1996 Apr 1990 Jun 1995 Feb 1991 Jan 1994 Nov 1993 1996 May 1993 1993
General Electronics Automotive Materials Proc Information Systems Electronics Aerospace General General General Electronics Electronics Electronics Textiles Materials Processing General Electronics General General General Aerospace General Chemical Textiles Electronics Electronics General General Agricultural Products General Information Systems General Information Systems
Vision in Manufacturing: Planning for the Future, Vol. 2: Technology: Enabling, Differentiating and Integrating Vision in Manufacturing: Planning for the Future, Vol. 3: Infrastructure: The Metrics and the Action Programs Vision in Manufacturing: Planning for the Future; Global Competitiveness in the Automotive Industry Vision in Manufacturing: Planning for the Future; Aerospace and Defense Industry Study Vision in Manufacturing: Planning for the Future; Global High Technology and Electronics Industry Study Visions for the 21st Century Vital Signs 1995: The Trends that are Shaping Our Future You Know Whats in My Heart
Deloitte & Touche Tohmatsu International Manufacturing Consulting Services Deloitte & Touche Tohmatsu International Manufacturing Consulting Services Deloitte & Touche Tohmatsu International Deloitte & Touche LLP Manufacturing Consulting Services Deloitte & Touche LLP Manufacturing Consulting Services Praeger, for Adamantine Press Worldwatch Institute Forbes
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PART 1 CROSS-INDUSTRY SUMMARY
1.0 VISION TECHNOLOGY DOMINATED ECONOMY: The future will be a technology dominated economy. STRONG MANUFACTURING BASE: A strong manufacturing base is vital to the economic and military strength of the U.S. Balanced allocation of Research and Development (R&D) resources between commercial and military sectors on affordable technology strategies will support U.S. global competitiveness. PROCESS UNDERSTANDING: Industry will develop a deep understanding of manufacturing processes, leading to cost savings and environmental benefits. AGILE PARADIGM: The agile paradigm with increased automation and agile operations including mass customization, quick response, and demand-activated manufacturing will be common throughout U.S. industry. NEW BREAKTHROUGH TECHNOLOGIES: New breakthrough technologies will be developed that will create new markets in which the U.S. can be globally competitive. BETTER AND MORE AFFORDABLE MATERIALS AND PROCESSES: Materials and processes will be developed to provide better and more affordable materials and processing into the next century. The U.S. will maintain economic leadership by remaining a world leader in materials processing. ADVANCED, INTEGRATED INFORMATION SYSTEMS: Advanced information systems will improve the quality of life by revolutionizing the way individuals relate, how they work together, and seamlessly access information without regard to geographic distance or corporate boundaries. Vast amounts of information will be at a workers fingertips, allowing them to tap into an extraordinary source of creativity and knowledge. Additionally, this information availability will allow establishment and operation of facilities anywhere in the world where a competitive advantage can be achieved. Global communications networks will facilitate the flow of large amounts of data, video, and audio information while providing the utmost security and privacy. A heterogeneous network of computers and communications systems will provide complete interoperability and reliability for this knowledge. Integrated information systems will transform century-old industrial organizations, shifting their focus from companies that create solutions to companies which engineer solutions. Representation from all departments of the manufacturing enterprise will be coordinated to successfully integrate advanced systems. NATIONAL INFORMATION INFRASTRUCTURE: The U.S. government will provide leadership for a national information infrastructure to improve access, security, ease of use, and regulations that govern its operation. R&D INVESTMENT: America will receive maximum value for its investment in R&D, and government R&D resources will be used more effectively for industrial competitiveness through a national technology strategy. The health and progress of industrial research will be maintained. WORKFORCE: Industry will employ a multi-skilled, continuously trained, highly committed workforce. HUMAN RESOURCES: There will be dramatic changes in social services and education. We will have human resource policies that invest in skills. GLOBALLY COMPETITIVE LEADERSHIP: U.S. industry will be globally competitive through leadership in environmentally and technologically superior, low-resource-intensive, sustainable manufacturing processes. The U.S. will have a growing competitive economy with high-skill, high-wage jobs providing enhanced national security and quality of life. GLOBAL COMPETITIVENESS: Globally competitive industry will be focused on technological knowhow, supply chain relationships, and agile organizations to continually find new approaches for innovation in product design, process technology, organizational structures, and strategic directions.
GLOBAL STRATEGIES: The new global reality means an environment that is more competitive than ever. Global strategies are developed at company formation; success depends on innovation, time to market, flexible organizational structure, and a creative approach to alliances with unlikely partners. All borders are fluid as the virtual enterprise shows promise as a powerful competitive strategy. CUSTOMER RESPONSIVENESS: Companies will respond quickly to global queries for products with affordable, high-quality solutions. Products will enter production with predictable and affordable costs and schedules, without sacrificing performance features. Global customers will be delighted by the quality, price, and environmental friendliness of U.S. products. MANAGEMENT CONCEPTS: Current concepts of management will be discarded. The future will be the era of mass creativity. Communication will be possible to audiences of one. PARADIGM BREAKING: Breaking current industry paradigms requires commitment to cultural change, integration of product and process manufacturing technology, and investments in people and technology. FLEXIBLE ORGANIZATIONS: Companies will have flexible organizational structures, treat workers as the most valuable company resource, and provide investment and profit sharing opportunities for all employees. U.S. industry will have broad, seamless integration, cooperation, partnering, and sharing of information, talents, and resources throughout the supply chain.
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2.0 GOALS, NEEDS, AND DRIVERS The roadmapping review effort identified an abundance of goals, needs, and drivers that cut across multiple industry sectors. While primarily focusing on the near-term (0 to 5 years), the cross-cutting issues are generally applicable to the mid term (5 to 10 years) and the long term (10 to 15 years). While a number of the industries surveyed did address longer-term issues, these focused primarily on natural extensions of advancing capabilities and improving performance over the next 15 years. For industry as a whole, however, there is little visibility into any new challenges that might arise beyond the basic 5-year window. 2.1 Goals GLOBAL COMPETITIVENESS: Every industry has a goal to be globally competitive, regardless of type and size of industry. This goal is mostly driven by the declining U.S. share of the global market, due primarily to the significant growth in foreign markets (particularly in newly industrialized countries as well as in the large and relatively untapped markets of China, India, South Africa, and the former USSR. Most of industry shares similar views on enterprise goals to become globally competitive: 1) Focus on anticipating and satisfying customer needs and demands. 2) Provide innovative total product/service customer solutions, building on world-class technology, to welldefined problems. 3) Reduce time required to take new products from concept to market (cycle time) by 50%. 4) Reduce total product life cycle cost by 50%. 5) Minimize resources expenditures by better leveraging suppliers and partnerships to mitigate risk and share in investment. 6) Accomplish each of these objectives without compromising quality. GLOBAL MARKETS: Aggressively expand global markets and advance trade to facilitate economic growth. Focus on improving our positive balance of trade, whether or not some manufacturing has to be performed in foreign countries because of marketing, political, cultural, and/or socioeconomic factors. Numerous companies and even some industries already realize greater foreign sales and higher profits from international business compared to their efforts in the U.S. market. BENCHMARK CORE COMPETENCIES: Compare oneself to world competition, understand own core competencies (product, process, and technology), and those of potential suppliers and partners, and focus internal resources on what one does affordably best. NEED PARTNERSHIPS: Build ones core competencies; understand technology impacts, gaps, interrelationships, and redundancies. Seek partnerships to leverage others investment and/or share investment and risk for product line and/or technology partnerships, including companies, consortia, government, and academia. FOSTER INDUSTRIAL R&D: There are a number of challenges faced by industry, government and universities that should be addressed to maintain the health and progress of industrial research. This includes companies establishing a goal for influencing how much, if any, they want to direct and leverage resources of federal, state, university, and consortia resources to improve their global competitiveness. INNOVATION: Create an environment where innovation can flourish; whether it encompasses new design solutions to a customer need, new technology breakthroughs, or repackaging of current technology and reconfiguration of products and processes in response to changing needs, new processes, business practices, etc. METRICS: Metrics need to be tailored to and made a part of every companys goal statements. Some industries and most companies have very specific goals for company financial and market performance.
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PROCESS TECHNOLOGY FOCUS.: A structured focus on process technology is needed to have a positive impact on multiple products and programs, and more positively influence early conceptual design and variability analysis. In the food processing and textiles as well as materials processing industries, specific process goals need to be established for items such as process yield, corrosion resistance, set-up conversion, faster scale-up, reduced energy and water usage, reduction of waste and pollutants, reduction in flaws, etc. MATERIALS PROCESSING LEADERSHIP: Maintaining global leadership in materials processing R&D requires a coordinated approach to leverage both industry- and government-sponsored R&D to mitigate risk and leverage collaborative investment. SINGLE INDUSTRIAL BASE: Establishment of a single dual-use industrial base is needed for the commercial industry to take advantage of federal R&D and for DoD and DOE to take advantage of commercial R&D, processes, products, and business practices. PARTNER/LEVERAGE R&D: Deliver not necessarily build the highest-quality products, and bring them to market in the shortest time. Establishment of strategic alliances for attaining competitive advantage is becoming common in the commercial electronics, aerospace, and transportation industries. In addition, most companies are realizing the importance of their traditional suppliers and have a goal in place to involve suppliers and all stakeholders in the development of new products and to focus on continuous improvement. The degree of increased collaboration with consortia and universities as well as federal and state centers of excellence need to be established to leverage others investments and mitigate risk. This should include a federated laboratory concept to establish focused centers of excellence operating in a virtually co-located, distributed environment. INFORMATION SYSTEMS: Information system upgrades should be considered an asset, not an expensive investment. Overwhelmingly, most industries selected information systems as a key enabler to achieving global competitiveness from a product, distribution, and communications standpoint, to enable all stakeholders to have the information they need to make informed decisions in any phase of the product life cycle, for any functional domain, at any place in the supply chain. Information systems must be constructed to be affordable, easy to use, flexible, and responsive to customer needs. ELECTRONIC COMMERCE: Many more consumer industries, such as textiles/apparel, food, automotive, and commercial electronics target use of the electronic commerce network to interface directly with customers to perform orders, sales, purchasing, distribution, tracking, financial transactions, etc., as a key strategy. Goals are established for how much electronic commerce business should be conducted over the Internet. PEOPLE ARE AN ASSET: Companies seem to be moving to recognize human resources as an asset rather than an expense. Increased emphasis, both in time and money, needs to be an integral part of a companys investment strategy to improve job and team interactive skills through increased emphasis on education and training. The human resource education and training investment must be increased. Particular emphasis must be placed on learning to operate in cross-functional teams and continuous learning of multiple job skills to better enable operation in an agile environment driven by continuous change. Creating a more positive image of manufacturing in universities and vocational training facilities, and increased emphasis on math and science in K-12, needs to be driven by industry. Industry needs to establish a goal for how much investment they are willing to make to having a more flexible, skilled workforce. ENVIRONMENT, HEALTH, SAFETY: Companies are increasingly recognizing their obligations to ensuring a quality of work life essential to economic growth, based on establishing specific goals in their strategic plan for addressing cost-effective environmental, health, and safety issues. Taking a proactive approach will reduce downstream costs, and in many instances new technologies are emerging to convert waste to byproducts that can be reused in the manufacturing process, reduce energy costs, reduce workers compensation costs, etc.
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2.2 Needs ADVANCED MATERIALS PROCESSING: Advanced materials development needs identified include: advanced composites, ceramics, crystal matrix, wood products, bioactive fibers, magnesium/graphite, superplastics, silicon carbons, electronic, photonics, and semi-solids. ADVANCED PRODUCTION PROCESSES: Advanced production process needs include: production processes for materials; chemicals, IPPD/IPT; diagnostics; simulation and modeling; CAE; advanced manufacturing cells; waste (water, emissions, power, electricity, etc.) reduction, recycle, and disposal, joining, net forming casting and dies. ADVANCED BUSINESS PRACTICES: Advanced business practice needs include: strategic supply chain management, ABC/ABM, target costing, standards adoption, defining technical affordability, rule-based management, life-cycle management, innovation management, knowledge-based management, and flexible management processes. ADVANCED PROCESS ENABLERS: Advanced process enabler needs include: advanced sensors, intelligent closed-loop control systems, operational systems integration; and from a business standpoint, include a national information infrastructure, multimedia technologies, business process integration, open interoperable systems, and R&D/technical management systems. HUMAN RESOURCES: Human resource needs include: empowerment processes (teaming, cross functional development, partnering, etc.) and increased education and training. ADVANCED PRODUCT TECHNOLOGIES FOR SPECIFIC INDUSTRIES: Advanced product technologies need to be invented, developed, and implemented to make quantum leaps in product performance/value for all of the industries evaluated. Specific needs identified for the 5- to 10-year timeframe include: ADVANCED MATERIALS: Advanced materials needs include oxy-fuels, high-temp fibers, organic materials, tetrafunctional epoxies, cyanate esters, ozone free cleaning materials, nickel metal hydrides, and rechargeable lithium. ADVANCED MANUFACTURING PROCESSES: Advanced product process needs include dry film and liquid photo etching, environmentally benign plating and coating processes, and intelligent manufacturing systems enabling independent decision making. ADVANCED BUSINESS PROCESSES: Advanced business process needs include mission planning systems and reduced federal regulatory requirements (further expansion of adoption of commercial business practices). ADVANCED ENABLERS: Advanced enabler needs include modular (plug and play) systems and compatible international standards. ADVANCED PRODUCT TECHNOLOGIES FOR SPECIFIC INDUSTRIES: Advanced product technologies need to be invented, developed, and implemented to make quantum leaps in product performance/value for all of the industries evaluated.
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2.3 Drivers INCREASING CUSTOMER REQUIREMENTS: Customer expectations are increasing. Customers will demand personalized products and services, in units of one. There is increased customer sophistication, a higher demand for satisfaction, a demand for decreased time to market, shorter delivery times, lower product cost, and increases in quality, product variety, and customized products. Customer service will be a key driver. Serving the customer, rather than technology, is becoming industrys driving force. There is a change from technology push to customer pull. Customers are becoming more integrated into the supply chain. GLOBALIZATION/INCREASED MARKETS: Emerging markets simultaneously present new opportunities and new levels of risk and competition. China is a particular example of huge commercial possibilities combined with high risk due to a volatile political and economic environment. Globalization will occur through the use of portable manufacturing operations, followed by development of portable product engineering and R&D. The conflict between economic nationalism and internationalization of economic activity has led to protectionism and regionalism. International standards will impact the way business is done. Increasingly, uniform access to resources will be available to all nations. The gap in income among people in the world is widening, while resource availability is decreasing. GLOBALIZATION/INCREASED COMPETITION: Competition is increasing. There are more global players, and developing countries workforce skills are coming close to those of the U.S. Mexicos quality is on par with global competitors, for example. Foreign firms can now easily compete in U.S. markets; as a result, the U.S. has lost market share (and domestic jobs) in a number of critical industries. The trade deficit is large and increasing. Global trade agreements will continue to alter the way business is conducted around the world. RAPIDITY OF TECHNICAL CHANGE: The world is becoming more technically sophisticated; the rapid pace of technological change will continue, and technology will increasingly be a prerequisite for responding to rapid change. Product life is shortening, and lot sizes are decreasing. There is increased automation and more readily available new technology. This mandates continuous insertion of new functions, materials, equipment, and techniques into the manufacturing base and corresponding focus on managing innovation. Three technologies will have a big impact: communications, materials, and biotechnology. HUMAN RESOURCE CHANGE: The future workforce will be more knowledgeable. The notion of permanent employees is vanishing. The American population and workforce is aging. There is a growing pool of unemployed at the same time there is a shortage of high skilled labor. U.S. workers and managers had been more skilled than competitors, but are no longer. Developing countries have technically educated and underutilized people. EDUCATION AND TRAINING OF WORKFORCES: Awareness of the need for worker training and education is on the rise. There is a rising level of specialized skills required. LOSS OF TECHNOLOGY LEADERSHIP: The U.S. has lost its technological leadership in many areas, such as software. (This statement is very often repeated in the documents reviewed.) Our prior position of technical dominance has changed to being first among equals. Technological leadership will determine future success. The U.S. is not good at transferring technology to market or between firms. COST PRESSURES: Cost leadership is more important than ever. Increased competition is dictating increasingly shorter-term focus on profitability, largely at the expense of long-term investments. GOVERNMENT/DEFENSE ISSUES: There is an increasing shift from military to commercial work. The defense sector is becoming more dependent on technologies that are applied first in the commercial sector. The drop in defense spending has caused massive defense industry downsizing, harming the U.S. technical base. Maintaining national security with a diminishing defense industrial base is a challenge, particularly in the face of a more diverse and complex mix of low-intensity threats. Defense procurement lacks the flexibility and responsiveness to take advantage of commercial developments. INDUSTRIAL RESEARCH: Industrial research growth has slowed, and U.S. preeminence in R&D is fading with reductions in defense R&D by the federal and private sectors. Industrial research is becoming internationally distributed, and strategic technology for the future is being developed commercially rather than mili14
tarily. There is a shifting of emphasis from basic research to applied research, and a focusing of R&D on what adds value to existing core competencies. Federal labs have a $21 billion budget, and therefore a significant impact on R&D. INFORMATION SYSTEMS IMPACT: Information systems are proliferating and becoming more universally accessible. Firms are relying on telecommunications and information to manage operations globally. These technologies are increasing the dispersion of world-wide manufacturing. Improved communication and efficient transportation have allowed diverse networks to form. The U.S. is still in transition from an industrial to an information economy. ENVIRONMENTAL IMPACTS: Increasingly stringent environmental constraints, particularly relative to recycling and energy consumption, are strong drivers in many industries. Materials processing industries are particularly sensitive to these concerns. REGULATORY/POLICY IMPACTS: Policy drivers affecting business include: trade policy (such as NAFTA) education, macro-economic policies, anti-trust laws, tax policy, and science and technology policy. Foreign governments are providing financial subsidies to lower the cost of capital, encourage industry-friendly practices, and promote domination of specific industries. They have targeted electronics as crucial to their economy and have restricted foreign entry, forcing technology transfer from foreign suppliers to their domestic firms. The U.S., in contrast, has a largely hands off industry support policy. The rise of regional trading blocs is also a driver of competition. Regulations that are impacting global and national business include intellectual property rights and environmental and safety regulations. The cost of capital is high, resulting in decreased investment and decreased productivity. INCREASINGLY INTERDEPENDENT SUPPLY CHAINS: Lines between manufacturer, distributor and retailer are becoming less distinct. There is increasing collaboration and increasing dependency on supply chains. ORGANIZATIONAL STRUCTURES: Companies are becoming flatter and leaner. While this increases responsiveness and communication within the organization, it increases employee workloads, impacts morale, and decreases the depth of organizational resources available to respond to challenges and opportunities. Major restructuring of companies has reduced the number of companies left in a number of industries, with a number of acquisitions being done by foreign concerns. ECONOMIC GROWTH: World economic growth has been accelerating (1992-94) up to 3.1% in 1994. Asian countries as a whole grew at 8%; China, Korea, Thailand and Taiwan grew at double-digit rates over these years. Global exports are rising. There is a correlation of business growth to replacement of equipment, making high-growth regions better equipped for production. Market fragmentation is being accelerated by media fragmentation. Developed countries will move to advanced manufacturing of products with combined hardware and software. The growth of an economy (such as Japans) depends on the stability and development of the world economy. STANDARDS: Standards have both a positive and negative aspect. While international standards are extremely important for interoperability, the U.S. has a poor standard-setting record and standards often open competition for foreign competitors who are good at engineering. The defense and communication industries have tight specifications; these technologies are widely used and drive tightening specifications in other sectors. International production networks make management and regulation difficult. PRODUCT/MATERIALS TECHNOLOGY DRIVERS: Product technology and/or materials processing are the leading edge technology that drives where, when, and how the industry is moving are identified by industry.
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3.0 BARRIERS 3.1 Near Term 0 to 5 Years The pace at which new product and process technology is generated throughout the world has grown exponentially, creating new markets and rapidly changing sources of competitiveness. There are rising concerns with the stability of the world financial system as well as with international peace and security. Individual economic agents (i.e., companies) as well as governments are increasingly exposed to a complex interplay of market forces and processes over which they have less control. Industry and government have been slow to respond to the changing international environment. There is a lack of top-level recognition for the importance of manufacturing as a creator of wealth, due to inadequate understanding of the holistic view of manufacturing. The U.S. has not supported technology development in a way that can support U.S. leadership in the post-Cold war era. Outdated strategies are being used, such as producing only for U.S. markets, drawing technology only from local markets; mass production rather than lean production; high-volume, undifferentiated products, price competition, simplification of jobs, and hard, fixed tooling. A non-level playing field exists with regard to foreign government financial subsidies, cost and availability of capital, and industry-friendly practices, regulations, and policies. This is enabling foreign competitors to dominate certain targeted industries that create jobs and generate tax revenues to enhance their respective countries overall standard of living. International economic and cultural realities present further barriers. These include currency exchange rates, lack of cash by third-world purchasers, volatile political environments, and privatization of critical defense facilities). Poor economic performance of the world market (e.g., dismal performance of European operations and the long recession in Britain), outdated thinking about the world economy, and lean production have created a threshold for product quality and cost that no producer can realistically meet. With the globalization of industry; the various international cultural differences; political considerations, and human, organizational, and societal factors create significant constraints throughout the supply chain. There are differing government regulations across global markets, and international economic and cultural realities present further barriers. Anti-trust legislation hinders integration across firms in the U.S., and differences in regulations create an non-level global playing field. The setting of trade policies has a number of shortcomings: passing of information between government agencies is fragmented, trade policy is subordinated to foreign policy, trade policy focuses on process rather than on results such as market share, the long-term impact on technology development of trade policy is not adequately considered, and there is no process to build industry-government consensus. Government is poorly organized to deal with commercial technology policy. Lack of management vision and understanding of the strategic benefits of the application of technology hinder the exploitation of use of advanced information systems. There is no implemented National Information Infrastructure Strategy. Management of technology is not understood, and the culture of manufacturing is highly conservative. Strategic benefits of manufacturing technology are not considered, and obsession with productivity has curbed creativity. Singular technology solutions are sought, rather than integrated solutions. Standard measures of performance are no longer adequate. Managers have become complacent from being habitually ahead. There is an aversion to both shared and individual risk. There is little payoff for risk-taking, so needed technology goes undeveloped. Resistance to change is influenced by company size and imbedded culture. There exists weak support for process technology development, product flexibility, and mechanisms and methods to increase supply chain flexibility; and post-sales service is poor. The benefits of technology realized have been limited due to poor product and process integration. A number of factors contribute to preventing cost-effective and timely development of critical materials: lengthy, expensive commercialization processes, rising energy costs, and increasingly scarce repairable assets.
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Current information technology is inadequate to support future manufacturing needs; and new technologies being deployed are based on ill-defined, anticipatory, and competing standards. The cost and effort to define, develop, test, and implement measures to overcome security challenges posed by hackers, intelligence operations, and info-terrorists to the global enterprise is overwhelming. Clearly, the government must move quickly to protect security and privacy, but its exact role is subject to much debate. Standard measures of performance and practices of accounting are no longer adequate. Current techniques to measuring the results of quality programs and customer satisfaction are insufficient, and metrics are needed to optimally evaluate and manage a process, company, enterprise, etc. Insufficient knowledge, tools, and techniques exist to support design for affordability as well as performance, particularly early in the design phase before the conceptual design is frozen, at which 70% of the product life cycle cost is established. This is still prevalent in most commercial products. There are a number of high-cost items (activities, processes, materials, components, assemblies, products) that need order-of-magnitude cost reduction to be more universally useable. Supply chains are large, unwieldy, and poorly integrated. The supply pipeline for the integrated textile complex, for example, is over a year long for many products. Less than 20 percent of that time is involved in actual production. Large inventories of up to 180 days of finished goods are required to meet retail sector needs because of the unresponsiveness of the product pipeline. High-output, large-scale processes in the fiber production sector are relatively inflexible and inefficient for changing from one product to another. Energy, labor, materials and first quality capacity are wasted during fiber product transition. Dying and finishing processes are not flexible, rapid, or efficient. MANAGEMENT OF TECHNOLOGY FOR SHORT TERM PROFIT: Capital justification for advanced technology investment is very difficult under short-term profit incentives and market uncertainties. Traditional management has not linked short term actions with long term strategy. Technological investments have not been properly justified financially. Managers are financially sophisticated but are removed from the details of the technology. There is an excess of financial control and focus on short term financial factors. Standard measures of performance are no longer adequate. The high cost of capital, aggravated by low savings rates, contribute to the short term focus. This prevents investment, which in turn limits productivity growth. MANAGEMENT OF TECHNOLOGY GOVERNMENT VS. INDUSTRY: Sequential development cycle, particularly in DoD products, severely impacts the cost and time required to implement new technologies. Regulations, policies and practices inhibit knowing the real manufacturing cost and impose business constraints that negatively impact all industry sectors. Government has not seen the impact of technology on the economy and has not focused public policy on developing commercial applications of technology. This has limited infrastructure growth. Reduction in federal support has limited the commercial adoption of breakthrough processes and technologies in many industries, notably aerospace. This condition is further impacted by increasing foreign standards, weakness in U.S. sub-component manufacturing technologies, and poor federal/commercial technology validation. PROCESS VARIABILITY: Manufacturing process variability is not well understood. Current design approaches pay little attention to affordability and tradeoffs (manufacturability, producibility, repair, modification, overhaul, upgrade). Sequential development provides for inflexible manufacturing systems, which is a barrier to accommodating changing customer requirements. The U.S. has an incomplete awareness and understanding of product variety and importance of service and repair. ENVIRONMENTAL: Lack of environmentally sound materials, processes, and technologies, coupled with increasingly complex regulatory compliance requirements, present significant barriers to the global competitiveness of U.S. firms. While there are growing concerns over the environment, and the safety and health of workers and the public, the lowest-cost, fastest-compliance track is not necessarily the optimum long-term solution. COOPERATION, COLLABORATION, & TEAMING: While some foreign countries have used cooperation within industries to eliminate redundant efforts, there is no U.S. process to build government-industry
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consensus. There are an insufficient number of international standards that are tailorable yet sufficiently robust that form, fit, and function technical criteria can be achieved from a broad base of commodities and/or suppliers to ensure integration. Extended enterprises normally do not have a common vision. Stakeholders are not committed to long-term mutual benefits. There is not a common view of how success is measured. Goals are not propagated. Company mission is not translated into actionable plans shared with employees. Supply chain management requires intra-firm cooperation. There are also social obstacles to cooperation, including a the NIH syndrome and lack of trust between individuals and between companies. There is a need for increased cooperation between management and labor, yet there is an unwillingness to empower individuals. In most every functional domain, in most every enterprise, at all levels, everyone works in individual silos, regardless of activity. Similarly, there is insufficient integration between mechanical, electrical, thermal, and environmental technical domains at a part level, let alone at the next-higher assembly levels, and at the end product/service level between software, hardware, and information. Joint design of production facilities by labor and management is needed to gain the trust required between the two. INFORMATION TECHNOLOGY: Current information technology is inadequate to support future manufacturing needs and new technologies being deployed are based on ill-defined, anticipatory, and competing standards. Past experience with information technology often has not lived up to expectations. However, it is a facilitator and enabler of major change within the manufacturing industry. Lack of management vision and understanding of the strategic benefits of the application of technology hinder the exploitation of use of advanced information systems. INDUSTRY/GOVERNMENT R&D INVESTMENT: The defense and commercial sectors are investing considerably less in R&D and capital than their foreign country counterparts; and we are not as effective at technology transfer. Product realization has been a poor cousin to research. Teamwork and heavyweight management of the development process has been better used in other countries than in the U.S. The U.S. typically spends 35% of the product cost on process and 65% on product, versus Japan with the reverse ratio. U.S. policy and university practice have contributed to the focus on basic research and science fundamentals rather than on industrial technology. The business environment and culture within DoD-oriented contractors is the result of years of adherence to military specifications and standards, interpreted through handbooks, resident oversight agencies, and third-party activities. Elimination of centralized corporate R&D labs is creating technical isolation that may weaken the nations long-term science and technology base. R&D is often now more focused on companies core strengths and the real-world needs of its operating divisions. Few enterprises allocate enough budget to conduct robust technology development to ensure that new products can perform the planned functions and still be manufactured at low cost. A lack of basic, longer-term technology research has led to the view of the food industry as low tech by government and research organizations. Few collaborative efforts exist between government and companies in this industry. WORKFORCE TRAINING: Growing use of cross-disciplined teams of experts in developing materials and new manufacturing processes has created a vacuum of adequately educated and trained people. Many university graduates have inadequate understanding and knowledge of practical engineering versus science, and academic success shows little correlation with on the job performance. Specifically competent workers for tomorrows technological factory are not now available and there is little prospect of improvement in the forecast. The U.S. has educated and trained our people to be scientists vs. engineers, individuals vs. team players, specialists vs. generalists, white collar (office bureaucrats) vs. blue collar (hands-on factory workers), and designers vs. manufacturers. TRAINING AND EDUCATION: The education and technical skills of workers are inadequate. K-12 school systems are not in step with industry hiring needs (basic skills such as math and reading/writing). Most university professors are poorly informed about industry needs. Community college teachers are far more knowledgeable. The perception among educators is that manufacturing is a second-rate career. University curricula and research need to be more relevant to industry. Multidisciplinary curricula, like manufacturing engineering education programs, are slow to evolve. Education and training for information technology is grossly inadequate for management, technical staff, and support personnel. Research efforts at U.S. universities are limited, fragmented, and uncoordinated across the various subfields.
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DEFENSE POLICY INVESTMENT: U.S. investment patterns do not foster manufacturing growth. The government has been hesitant to take a leading role in strengthening manufacturing, and thus represents one of the greater barriers to manufacturing. This is reflected in the instability of the DoD Manufacturing Science and Technology (MS&T) budget, lack of congressional/DoD cooperation, and a high level of earmarked, congressionally self-motivated MS&T budget allocations that do not target critical needs and urgent requirements. U.S. dominance in enabling aeronautical technologies has evaporated; lack of direction in aeronautical modernization has led to poor health of subcontractors, limited emphasis on process technology, and minimal flexibility between product performance and manufacturing affordability. This is compounded by congressional/DoD budget conflicts. DEFENSE POLICY ACQUISITION/ACCOUNTING: The information and intelligence systems across government agencies and between government and industry are highly fragmented. Federal acquisition processes and systems are inefficient and inflexible in practice due to archaic federal laws and policies. How to, performance only acquisition specifications restrict development organizations from exploring less costly alternatives to achieve user needs. Contracting procedures are overly burdensome and often inappropriate to Technology Base activities. Federal laws and regulations dramatically and adversely affect product affordability and risk, and the complexity of products is substantial. These barriers include data rights, government vs. commercial specifications, lack of common parts, and resistance to change. American dominance of virtually all fields of technology and especially defense technology-during the postCold War period is giving way to a position of first among equals. DoD is bureaucratic in habits and leadership, which has led to difficulty in properly selecting, maturing, and managing technology. The DoD has burdensome contracting and accounting procedures, unique specifications, and processes which do not achieve common values and expectations. Many commercial parts are not directly applicable to DoD unique needs. Widespread lack of confidence exists in DoDs ability to use commercial parts, materials, and practices. RESPONSE TO RAPID CHANGE: Traditional bases for corporate decisions about technology are less effective with the rapid pace of change in product and production technology. Long product introduction and changeover cycle times present significant barriers to competitiveness and corporate survival. Adjusting production processes or operating conditions is usually very costly and time inefficient. PRODUCT TECHNOLOGIES: Several barriers specific to the electronics industry present major impediments to substantive advances in product performance and cost-effectiveness. These include packaging, systems designs, complexity, sensor integration, low-cost composite materials, and the high cost of facilities. The construction industry has barriers in the development of lightweight, high-strength, high-ductility, and innovative adaptive construction materials and criteria including characterization of nonlinear, viscoelastic, viscoplastic material response under dynamic loading, development of three-dimensional, coupled analytical software for accurate assessment of mobility and structural response. Also itemized were development of innovative construction concepts for mobile military operations, and advancement of understanding of the physics of fire and extinguishing mechanisms. Also, certain materials have unique barriers to achieving costeffective manufacturing that can limit their broad use. 3.2 Mid Term (5 to 10 Years) and Long Term (10 to 15 Years) The majority of the barriers discussed above are equally applicable in the mid-term and longer timeframes.
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4.0 ENABLERS Enablers are those attributes or capabilities that help organizations fulfill their needs and achieve their goals. The roadmapping effort identified four categories of enablers Technology Enablers, which include Product, Process, and Infrastructure enablers; Business Practice Enablers; Cultural Enablers; and Environment Enablers. 4.1 Technology Enablers 4.1.1 Near Term 0 to 5 Years Product Enablers Technology enablers that support manufacturing processes include: 1) integrated product/process development (IPPD), 2) new design processes for products and processes, 3) efficient and accurate modeling methods and tools, 4) complex systems that respond to change more easily and rapidly, 5) advanced materials/components, 6) improved use of defense critical manufacturing and engineering systems, 7) specific product/process technologies for advanced sensors, aeronautics, agricultural, automotive, biomedical, construction, electronics, energy and environment, machine tool, textile/apparel, and transportation industries; and 8) National Critical Technologies Plan technologies. The electronics industry technologies are dispersed throughout this report as relevant to product application. INTEGRATED PRODUCT AND PROCESS DEVELOPMENT: Key enablers identified to support IPPD include a Thomas Register of national industrial manufacturing assets (large, medium, and small); inexpensive CAD/CAM technologies for supply chains; integrated systems for scheduling, planning, tooling, etc.; capture of nominal and variant product behavior; decomposition of solid shapes for automated stress analysis; and design methods and tools for groups of parts and systems. Improved product/process design technology help to evaluate trade-offs in cost, performance, quality, reliability, and decrease design and process development time through concurrent engineering. Achievement of rapid product/process realization is based on application of IPPD strategy, use of integrated product teams (IPTs), seamless, open systems, and an integrated computer environment to facilitate incorporating the manufacturability, producibility, reliability, maintainability, supportability, and disposal knowledge impacts by domain experts before a conceptual design is frozen. Information systems and computer technology will provide better control of the manufacturing process across the integrated supply chain. One of the most significant technology enablers is the integration of information technologies in all areas of the product life cycle including design, use of standard parts and components, increased robotics, and better production process technologies. NEW DESIGN PROCESSES: New design processes for products and processes include rapid prototyping for tooling and dies, sheet metal, and electronics; high-frequency design tools for RF electronics; factory optimization for electronics assembly; and advanced computer-based architectures for robust system architectures for live and virtual simulation distributed systems for performance assessment. Manufacturability and producibility need to be addressed in the early concept design phase for a number of key product technologies to be affordable. Also there is a need to provide robust, modular, adaptive, product designs capable of extensive reuse, and deep process understanding as it relates to the underlying science of electronic manufacturing processes assuring designing for manufacturability and affordability. MODELING AND SIMULATION: Key enablers identified include efficient and accurate methods and tools for all functional domains (product, process, factory, enterprise), human interface, 3D product definition, systems engineering, product life cycle, and design-to-cost to optimize the product/process design from a product life-cycle standpoint; and planning, scheduling, and production systems to improve productivity and product costs. COMPLEX SYSTEMS that respond to change more easily and rapidly include client/server computing, complex system theory in manufacturing, context-sensitive agent-based interfaces, customer and supplier in-
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terfaces, distributed database management, knowledge technology for integrating planning and operations, manufacturing communications, and object-oriented technology. ADVANCED MATERIALS technology enablers crosscut most industries. These include development of key metallic materials for airplane and other structures, propulsion, and subsystems applications; lightweight vehicles; electronics, optics and survivability materials applications; and composite materials applications. Lightweight aluminum, plastic, and smart materials will be used in automobiles to improve acceleration, drivability and customer satisfaction. Other enablers include: high performance, new materials to construct new tools and light weight vehicles; advanced control systems for rail and smart transportation systems; and alternative fuels and power systems for electric and diesel engine technology. Two significant material technology areas need substantial support for aerospace: low-observable technologies and advanced materials such as composites and superalloys. Advanced techniques to improve machine structures and materials include improved existing processes to extend service life and increase capabilities of current processing equipment, new manufacturing processes with improved cost, response, performance; accelerated use of best practices in defense-critical processing and fabrication; and new board assembly technology. IMPROVED USE OF DEFENSE-CRITICAL MANUFACTURING AND ENGINEERING SYSTEMS: This enabler includes early involvement of manufacturing in requirements and design, design for six sigma, design for producibility and cost, reverse engineering of systems no longer in production, tools and methods for distributed multi-function teams, rapid prototyping, and engineer design/manufacturing tools. Technology breakthroughs are required in the areas of: electronic and photonic devices, communications systems, rotary-wing aircraft, navigation, and support ships. DARPA projects considered critically important for technical advancement of military systems include: high-definition flat panel displays, Rapid Prototyping of Application Specific Signal Processors (RASSP), Infrared Focal Plane Array (IRFPA) Flexible Manufacturing, Interferometric Fiber Optic Gyroscope (IFOG), Active Electronically Scanned Arrays (AESA), and Affordable Multi-Missile Manufacturing (AM3) for tactical missiles. There are extensive lists of enablers identified for product technology-driven components/processes in the following key industries/areas: advanced sensors, aeronautics, agriculture, automobile, biomedical, construction, electronics, energy and environment, textile/apparel, and transportation. ADVANCED SENSORS: Advanced sensors (including integrated devices) have many new product applications in enhancing product performance as well as being a key enabler for closed-loop manufacturing process control. By merging the capabilities of sensors and actuators with information systems (transistors), microelectromechanical systems (MEMS) are extending and increasing the ability to both perceive and control the physical world. Sophisticated real-time measurement and control systems are needed for environmental applications. AERONAUTICS: Process enablers identified include fiber and resin processes; advanced part fabrication methodologies; process control; superalloy forming and joining; high-temperature coatings; radiation hardened electronics; process physics; math-based processors; process integration; and autoscheduling processes. Other advanced macro process identified have wide applicability in aeronautics and other industrial sectors. These include: a synthesis tool for optimized digital components; integrated satellite ISDN, adhesive and resin transfer bonding, and composite delamination processes. Advanced materials and associated affordable technologies and processes will be essential to a robust aeronautics industrial sector: high-temperature ceramic matrix composites and processes; titanium aluminide alloys and processes; superplastic forming and diffusion bonding; electromagnetic technologies processes; automated/intelligent coating; and near-net shape machining and forming. Control of advanced process variability is essential to quality, defect control, and process entrance and exit criteria. A strong effort must be initiated in simulation and modeling of both business and manufacturing/distribution processes to ensure first-time success on low-volume, affordable, highly complex and variable products needed by aeronautical sector customers. AGRICULTURE: Process enablers identified advanced process design and analysis techniques, energy efficient reduced water processes, in-process sensors, and computer-integrated management and process control. AUTOMOTIVE: Design technologies include new energy conservation and conversion systems that will decrease energy usage and level energy demand in the automobile; e.g., regenerative braking to recapture energy,
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flywheel systems, and ultracapacitors; advanced propulsion technologies including advanced internal combustion engines, fuel cells, lean burn internal combustion engines, gas turbines and hybrid propulsion systems; and lightweight aluminum, plastic, and smart materials to improve acceleration, drivability and customer satisfaction. Manufacturing technologies include information systems and computer technology to provide better control of the manufacturing process across the integrated supply chain (e.g., integrated vehicle design will include components engineered by suppliers); vehicle electronic content is expected to continue to increase and flexible, automated manufacturing will be used to produce high-volume, low-cost products with a high degree of customization. BIOMEDICAL: Key enablers include advanced triage diagnostics, advanced sensors and intelligent systems, blood substitutes, noninvasive physiological sensors, ventilatory support equipment, intelligent medical decision-making systems, nerve agent countermeasures and radiation injury treatments, vaccines, antibiotics, data collection and management systems, bone repair devices, and diagnostic devices. CHEMICAL: Key enablers include chemical science and engineering technology (process science and engineering technology, chemical measurement, and computational technology), supply chain management (information flow, communications, and database management), information systems, and manufacturing operations. CONSTRUCTION: Key enablers include integrated product/process development modeling and simulation; algorithms for mobility, physics, and knowledge; diagnostics and modeling for structures and virtual reality for training firefighters; physical processes for corrosion resistance and new uses for materials with structural strengths adequate for civil engineering needs; enhanced equipment and real-time process control for better weld joints, reduced variability in alloys, and enhanced laser and plasma coupled with adaptive forming. ELECTRONICS: Key design technologies include a number of targeted electronics product technologies that have specialized applications to make interoperable and affordable, including semiconductors and microelectronics, high-performance electronics packaging and interconnections; and key optoelectronics technologies that offer improved cost and performance over many silicon devices and offer opportunities for order-ofmagnitude performance improvement for new applications. Leading-edge semiconductor products technology includes use of commercial ICs and related components in some military operations. Key manufacturing enablers include achievement of rapid product/process realization based on application of IPPD strategy; use of IPTs; seamless, open system and integrated computer environments to facilitate incorporating manufacturability, producibility, reliability, maintainability, supportability, and disposal knowledge of domain experts; modular, flexible, robust, adaptive manufacturing equipment and tools; closed-loop predictive manufactured part process controls; automated testing incorporating physics of failure models; automated, affordable, flexible precision model-based assembly system(s) for increasingly smaller, denser, and more precise electronic assemblies; integrated, seamless manufacturing information systems that monitor and control the product being manufactured throughout all process steps; greater application of product and process standards to reduce the number of items to be processed and controlled, as well as greater application of information and measurement standards to ensure better integration of value-added activities; efficient process flow facility layout plans based on reconfigurable and modular functions incorporating individual product/process models wherever applicable; and high-performance electronic packaging and interconnections. ENERGY AND ENVIRONMENT: Energy use and production technologies must be improved and new techniques developed to extract maximum energy/material reuse from waste streams. Recycling of plastics by depolymerization/repolymerization; cleaner processes in metal plating and metal finishing; metal coating; and advanced adsorption technologies are identified as processes that enable improved environmental performance. TEXTILE/APPAREL: Key enablers include process control systems, in-line and embedded sensors, genetic engineering, rapid and continuous-flow manufacturing, supercritical fluid cleaning, advanced printing technologies, material handling, single-ply cutting and tagging technologies; automated, integrated, and modular cutting and sewing processes with on-line real-time inspection and diagnostics capabilities for both equipment
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performance and fabric quality; personal measurement systems to provide customized garment specifications; and user-friendly distributed, sensor based information systems for real-time planning and tracking of individual garments. TRANSPORTATION: Key design technologies include sophisticated simulation systems for testing complex research designs, design and analytical methods to determine strength characteristics, and value engineering process improvements; better understanding of friction, wear, and lubrication in materials, components, and engines in design; and NOx reduction catalyst development. Key manufacturing technologies include flexible and agile tooling and equipment, process control for laser beam welding, and intelligent welding. NATIONAL CRITICAL TECHNOLOGIES: National critical technologies impacting manufacturing are divided into the following areas: energy, environmental quality, information and communication, materials, and transportation. Energy consists of: 1) energy efficiency, which includes building (construction) technologies and noninternal combustion propulsion systems, 2)energy storage, conditioning, distribution and transmission, which includes advanced batteries, power electronics, and capacitors, and 3) improved energy generation, which includes gas turbines, fuel cells, next-generation nuclear reactors, advanced power supplies, and renewable energy. Environmental Quality consists of solvent replacements, monitoring and assessment, pollution control, and remediation and restoration. Information and communication consists of 1) components, which includes high-density data storage, high-definition displays, and high resolution scanning technologies, 2) communications, which includes data compression, signal conditioning & validation, and telecommunications & data routing, 3) computer systems, which includes interoperability and parallel processing, 4) information management, which includes data fusion, large-scale information systems, health information systems & services, integrated navigation systems, 5) intelligent complex adaptive systems, which includes autonomous robotic devices and artificial intelligence, 6) sensors, which includes physical devices and integrated signal processing, 7) software and toolkits, which includes education/training software, network & system software, modeling & simulation software, software engineering tools, pattern recognition, and software production. Materials consists of 1) specific materials which includes alloys, ceramics, composites, electronic materials, photonic materials, high-density materials, highway & infrastructure materials, biocompatible materials, stealth materials, and superconductors, and 2) structures, which includes aircraft structures. Transportation consists of 1) aerodynamics, which includes aircraft aerodynamics and surface vehicle aerodynamics, 2) avionics and controls, which includes aircraft and spacecraft avionics and surface transportation controls, 3) propulsion and power, which includes aircraft turbines, spacecraft power systems, and electrically powered vehicles, 4) systems integration, which includes intelligent transportation systems and spacecraft & aircraft integration, and 5) human interface, which includes human factors engineering and spacecraft life support. Process Enablers There is considerable overlap in the products and process areas, where both products and processes were are to support implementation of product technologies and design processes such as IPPD. The remaining technology process enablers are specifically related to manufacturing processes, as follows: 1) manufacturing/ business systems, 2) process simulation and modeling, 3)closed-loop predictive processing of materials and automated non-destructive methods of inspection and testing, 4) modular, flexible, robust, adaptive manufacturing processes, equipment and tools, 5) new manufacturing control methods, 6) specific machine tool processes/equipment/tooling enablers, and 7) support for generic technologies MANUFACTURING/BUSINESS SYSTEMS: Key process enablers identified in this area include: development of automated pull ordering, invoicing, and payment systems, design process integration tools, and production process integration tools; employment of a total systems approach to identify and develop enterprise software tools; science-based manufacturing rules to facilitate both designing for manufacturability and producibility as well as facilitating intelligent real time adaptive process control; development of methods to
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reduce non-value-added labor; equipment and software designed for human intervention; and self teaching mechanisms and design. PROCESS SIMULATION AND MODELING: Enablers in this area include: factory simulation, modeling, and process descriptions languages to check correctness and completeness of process design; algorithms and tools to solve process problems in real time; dynamic shop floor scheduling and production systems; dynamic models for describing available resources, integrated with intelligent, real-time sensors and on-line data collection. CLOSED-LOOP PROCESS CONTROL: Key manufacturing enablers include closed-loop predictive processing of materials and automated non-destructive methods of inspection and testing; intelligent processing of materials based on establishing physical and mathematical process models that enhances process design capabilities and rapid prototyping and serves as the basis for process simulation and on-line process control; process control tools, methods and controls; and computer simulation tools to capture materials and process characteristics as well as CAD data improve simulation and modeling of the materials processes. PROCESS EQUIPMENT AND CONTROL: To achieve modular, flexible, robust and adaptive manufacturing processes, equipment and tools key manufacturing technology enablers include modular, flexible, robust, adaptive manufacturing processes, equipment and tools. Key enablers include flexible, highly automated, integrated manufacturing systems incorporating SOA sensors and control techniques, machine and tooling concepts, material handling devices, information technologies, and computer hardware and software with a highly skilled adaptive workforce, more flexible, modular, plug compatible, and robust automated manufacturing equipment and tooling to more cost effectively manufacture small lots of a broad range of materials, process technologies for enhancing manufacturing cells, advanced materials processing controls for complex processing, machining and forming; and development of key applications that enable the continued development of critical technologies for 1) high-performance electronic packaging and interconnections manufacturing equipment and development of a manufacturing process understanding and automation, 2) defense electronics manufacturing process/equipment, 3) defense electronics improved reliability and maintainability process/equipment, 4) defense electronics microelectronics process/equipment, 5) silicon technology, 6) dual-use electronic printed circuit board/assembly process/equipment, 7) electro-optical process/equipment, and 8) National Electronics Manufacturing Initiative (NEMI) process/equipment. MANUFACTURING CONTROL METHODS: New process equipment and control methods to improve accuracy, quality, and cost include: adaptive welding, application of nonlinear and adaptive control, artificialintelligence-based CNC, autonomous next-generation controller, closed-loop control, compensation for thermal/dynamic/mechanical effects, distributed systems with predictable real-time performance, and predictive models for heat treatment. New work handling methods to improve efficiency and flexibility of shop floor workflow include: adaptive work handling, autonomous cooperating robots, autonomous job shop floor systems, improved group technology parts flexibility, means to sense part presence/location/orientation, reduction/elimination of fixture/handler contamination, and robotic handling of parts and tools. MACHINE TOOL TECHNOLOGY ENABLERS: This group supports multiple industries and includes: new machine designs, advanced spindle technology, new machine tool drives, and improved tooling to improve quality, reduce downtime, manufacture products in shorter cycle times; intelligent process sensors to enhance process/product knowledge; process modeling to improve process understanding, design, control, and productivity; and process control to increase quality, cost-effectiveness, and throughput. SUPPORT FOR GENERIC TECHNOLOGIES: This was identified as an enabler in several areas: electronic technologies, biotechnology, information technologies, manufacturing and process technologies, and advanced materials technologies. Infrastructure Enablers The Technology Infrastructure List includes 1) monitoring and evaluating international technology and political trends, 2) government assisted investment, 3) information systems infrastructure including advanced computing and industry standards, 4) product/process standards application, 5) development of key applications that enable the continued development of critical technologies, and 6) product/process support technologies.
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MONITORING AND EVALUATING INTERNATIONAL TECHNOLOGY AND POLITICAL TRENDS: It is essential that the U.S. infrastructure be integrated and expand internationally. Furthermore, the U.S. must have in place mechanisms for monitoring and evaluating international technology and political trends. It should provide support for basic technology and education, a strong fundamental science base, and generic technologies in the following areas: electronics, biotechnology, information, manufacturing and processes, and advanced materials. GOVERNMENT ASSISTED INVESTMENT: Government-assisted investment in specific infrastructure needs will accelerate economic growth. Key areas identified include: information infrastructure; national user facilities for technology development; energy-efficient federal buildings; upgraded highways and transit systems, including magnetic levitation transportation and high-speed rail investment, smart highways research, and civil aviation technologies research; new materials research; new assessment technologies to assess expected life of existing public infrastructure; benchmarking of foreign government activities; assessment of U.S. infrastructure needs; linking public and private efforts; support for education at all levels; establishment of technology networks; identification and dissemination of key technologies; development of technology roadmaps, building supplier networks to set standards and share information on critical technologies; development of leading commercialization practices; use of TQM, process engineering, workforce skills upgrading; and sharing of risks in development. INFORMATION SYSTEMS INFRASTRUCTURE: Key enablers in this area include high-speed communications mediums including broadband, narrowband ISDN, ADSL, and wireless technologies; distributed computer applications accessible over the Internet to support networked factories, microfactories, and realtime communication architectures; computer-aided systems engineering (CASE) tools that allow manufacturing personnel to create systems and capitalize on software reuse; advanced information storage and transfer mechanisms to effectively communicate product and process data; alternative delivery mechanisms for manufacturing training and education to address workforce re-education needs; mathematically based product, process, and factory models to support multiple perspectives of data and knowledge that can be used to simulate and reprogram factory operations; open-architecture, autonomous agent-based systems to handle complex, dynamic environments and legacy issues; improved human/computer interface mechanisms to present a wide variety of factory information to users; artificial intelligence technologies that fuse information from intelligent sensors across the entire factory; on-line access to electronic information services, libraries, electronic commerce and training applications. Apply various variability reduction techniques and tools to better be able to design for manufacturability, producibility, and reliability in the early phases of product design. Provide significantly more robust, modular, integrated suite of design tools to enable the designer in a cross functional distributed and virtual team to optimize affordability and performance across and between the various engineering domains (systems engineering, electrical, thermal, mechanical, structures, etc.), and functions. Provide for rapid physical and virtual prototyping. Provide more user-friendly, fault-tolerant engineering/manufacturing/test/inspection software. Integration of enterprise business systems with engineering and manufacturing systems in a (paperless) distributed and virtual environment will enable performance improvements in all aspects of the product life cycle. PRODUCT/PROCESS STANDARDS APPLICATION: Greater application of product and process standards will reduce number of items to be processed and controlled, as well as greater application of information and measurement standards to ensure better integration of value-added activities. DEVELOPMENT OF KEY APPLICATIONS THAT ENABLE THE CONTINUED DEVELOPMENT OF CRITICAL TECHNOLOGIES including bar coding, computer-aided design, electronic data exchange, integration of manufacturing systems, just in time, manufacturing resource planning, and planning and control technologies. PRODUCT/PROCESS SUPPORT TECHNOLOGIES: These technologies will require considerable effort to mature to the required level of advancement. For example, product/process simulation and modeling must be enhanced, and a real-time repository of R&D technologies, programs, and initiatives and manufacturing industrial efforts provided to support improved planning, prediction, and decision-making and decision im-
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pact. It is overwhelmingly understood that the development of two critical advanced enabling technologies must be accelerated: integrated information systems, and product/process simulation and modeling. 4.1.2 Mid Term 5 to 10 Years Product Enablers Most of the product technology enablers are defined in the 0- to 5-year, near-term (Section 4.1.1) timeframe. Additional current industry roadmap reports that define future technology needs have been detailed as standalone summaries but have not yet been integrated into the specific industry summaries or the total industry summary reports. Following are additional product enablers addressed 1) development of intelligent equipment, e.g., artificial intelligence and expert systems, 2) development of key metallic materials used for airplane and other structures, propulsion, and subsystems applications; and 3) development of key electronics, optics, and survivability materials applications. INTELLIGENT EQUIPMENT: This includes artificial intelligence and expert systems; development of a national systems engineering framework for unambiguous digital representation of product and process definition using STEP and current CAE, CAD, CAM, CAT, and CAI tools; and an integrated, distributed opensystems environment for all enterprise users to enable virtually co-located operation. KEY METALLIC MATERIALS: These include the following materials for aircraft and other structures, propulsion, and subsystems applications: titanium aluminides, ceramics, and their matrix composites KEY ELECTRONICS, OPTICS, AND SURVIVABILITY MATERIALS APPLICATIONS: key enablers include advanced sensors, actuator technology, micro-machining, and nano-fabrication; displays; and semiconductors for international competition. Process Enablers The Technology Process List includes 1) Pursue concurrency within and between enterprises, 2) Characterize the material and process parameters for key products and processes and 3) Manufacturing technology strategy. Most of the process technology enablers are defined in the 0- to 5-year, near-term (Section 4.1.1) timeframe. Some more current industry roadmap reports that define future time bucket technology needs have been detailed as stand-a-lone summaries but have not yet been integrated into the specific industry summaries or the total industry summary reports. CONCURRENCY WITHIN AND BETWEEN ENTERPRISES: Enterprise concurrency is a key process enabler for the 5- to 10-year timeframe. This requires identification of generic infrastructure, technological, and organizational requirements for making the transition from flexible to agile manufacturing, and enhancement of distributed concurrent product control, development, and manufacture. MATERIALS/PROCESS CHARACTERIZATION: Characterize the material and process parameters for key products and processes to ensure designing for manufacturability, producibility, and affordability. MANUFACTURING TECHNOLOGY STRATEGY: Identify the generic infrastructure, technological, and organizational requirements for making the transition from flexible to agile manufacturing. Identify infrastructure requirements that will enhance distributed concurrent product control, development, and manufacture. Infrastructure Enablers The Technology Infrastructure List includes standards. Most of the infrastructure technology enablers are defined in the 0- to 5-year, near-term (Section 4.1.1) timeframe. Additional current industry roadmap reports that define future time frame technology needs have been detailed as stand-alone summaries but have not yet been integrated into the specific industry summaries or the total industry summary reports. STANDARDS: Enablers identified in this area include cooperative industry/government development of specifications for standards and expanded representation of the U.S. on international standards bodies. Key areas of interest include standards for a global broadband communications network, comprehensive manufacturing information exchange, and simplification of manufacturing-related standards architectures, making them more reliable and extendible.
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4.1.3. Long Term 10 to 15 Years Product Enablers The Technology Product List includes 1) gene transplant technologies, and 2) electro-optical technologies, e.g., 3D holographic displays, 3D solid image printing, and high power, low cost UV. Most of the product technology enablers are defined in the 0- to 5-year, near-term (Section 4.1.1) timeframe. Additional current industry roadmap reports that define future technology needs have been detailed as stand-alone summaries but have not yet been integrated into the specific industry summaries or the total industry summary reports. GENE TRANSPLANT TECHNOLOGIES are needed to create a deciduous cotton with no loss of other agronomic superior traits. ELECTRO-OPTICAL TECHNOLOGIES: key enablers include 3D holographic displays, 3D solid image printing, and high-power, low-cost UV. Process Enablers The Technology Process List includes automated manufacturing equipment. Most of the product technology enablers are defined in the 0- to 5-year, near-term (Section 4.1.1) timeframe. Additional current industry roadmap reports that define future time frame technology needs have been detailed as stand-alone summaries but have not yet been integrated into the specific industry summaries or the total industry summary reports. AUTOMATED MANUFACTURING EQUIPMENT: Develop more flexible, modular, plug-compatible, robust automated manufacturing equipment and tooling to more cost-effectively manufacture small lots of a broad range of products and materials. Infrastructure Enablers The Technology Infrastructure List includes 1) National Electronics Manufacturing Initiative (NEMI) infrastructure enablers including new government accounting/financial incentives to facilitate more reasonable return on investment, and 2) environmental policies and regulations. Most of the product technology enablers are defined in the 0- to 5-year, near-term (Section 4.1.1) timeframe. Some more current industry roadmap reports that define future timeframe technology needs have been detailed as stand-alone summaries but have not yet been integrated into the specific industries summaries or the total industry summary reports. NEMI INFRASTRUCTURE ENABLERS include the need to understand long-range product line family vision and strategy to best establish core competencies required to achieve that product line strategy, the need to perform detailed product and process technology roadmap for near-, mid- and long-term requirements to focus needed capital and IR&D investment, and the need to provide financial incentives and flexible accounting/intellectual property rights rules. ENVIRONMENTAL POLICIES AND REGULATIONS will be developed with the aid of multimedia environmental control optimization and modeling for lowest total environmental impact which specifically address requirements of the food industry.
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4.2 Business Practice Enablers 4.2.1 Near Term 0 to 5 Years INFORMATION SYSTEMS: Government must coordinate its efforts to establish a robust, secure information infrastructure not only within national boundaries, but with other nations as well. It must extend the universal service concept to ensure that information resources are available to all citizens and companies at affordable prices. It must promote international standards and fund pilots and demonstrations of new technologies and practices. Industry must jointly develop a shared vision of the information age and explore new market opportunities, make systematic investment in technology, and constantly seek to deliver high-quality goods and services. Private-sector investment in information systems is critical to stimulating technological innovation. Information transfer between companies must be enhanced to enable more effective planning and decision-making. UNIVERSITY IMPACT: The role of universities should be enhanced and industry should find more effective ways to work with academia so that academic policies and R&D more closely align with industry requirements. R&D INVESTMENT: Both industry and government must continue to promote advanced technology demonstrations and invest R&D in practical business and consumer needs. Industry must make systematic investments in technology. SKILLED WORKFORCE: Creating an appropriately skilled workforce is a significant challenge facing manufacturers. This requires strengthening of the human resource base to enable superior technology development; development and use of metrics to measure the value of workforce training and education; investment and profit sharing programs that maximize retention of valued people resources, including performancebased compensation and career ladders for non-degreed technical personnel; training of non-core employees for core employment; and transfer of the maximum number of tasks and responsibilities to those workers actually adding value to the product. EDUCATION: The near-term performance of public education is a critical determinant of competitive performance. Business must emphasize education and training, pushing reform of public education to meet the needs of industry, seeking commitment from the state to train current employees, and reforming education to become competitive. Key enablers identified here include: make school-to-work programs integral to education reform; use extension services, retraining of teachers, and new teaching methods from developments of cognitive science; and strengthen technician education and career advancement possibilities. Information systems must be applied to provide continual education of employees and upgrading of skills at all levels of the enterprise. Encourage knowledge sharing and promote collaboration. NEW ACCOUNTING PRACTICES: Develop accounting metrics that support agile needs, that reflect true environmental costs, that show true costs, and that show how environmental attributes improve sales and profits. Develop techniques to justify investments in flexibility. Develop systems to manage intellectual and information assets, using metrics that measure the impact of information on manufacturing. Use target costing in the conceptual phase of product development. FLEXIBLE ORGANIZATION PRACTICES: Create flexible organization structures that enable agile operations and rapid use of new technologies. Form alliances that link independent companies in customersupplier support system relationships, linking these with interactive information exchange systems. Develop core competency and cross-functional skills. Use empowerment to make rapid and effective decisions. Develop new predictors of job success and new performance measures for empowered teams. ALLIANCES: Form alliances that link independent companies in customer-supplier support system relationships on a national and global level. Develop mechanisms for pre-qualifying partners. CUSTOMER SERVICE AND FEEDBACK: Develop systems to improve customer feedback, enable greater understanding of customer requirements, and strengthen focus on customer satisfaction.
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TECHNOLOGY USE: Emphasis needs to be placed on more effective use of technology from all sources. Similarly, industry needs to establish a strategy for how best to work in consortia and/or federally funded R&D programs to leverage collaborative technology investments. GLOBAL MARKETS: Companies need to devote resources to understanding global market, industry and technology trends, and need to develop a strategy that addresses foreign engineering and/or manufacturing that supports ones own business opportunities. They need to use global sourcing (volume purchasing on a global basis) and global performance benchmarks and metrics. They need to revise export control restrictions and anti-trust regulations, providing R&D investment incentives and adopting a viable framework for R&D consortia and joint-venturing. Government has a key role in providing a competitive environment in which private industry can compete internationally in a level playing field. Foreign governments fund major programs and use aggressive incentives to establish a competitive global position in the rapidly emerging information and infrastructure, targeting strategic industries for special development incentives. Foreign countries allow favorable depreciation schedules for investment, and provide exemption or reduction in corporate income taxes, taxes of dividends, profits and royalties, custom duties and value-added tax on imported equipment. Considerations must include foreign trade policy, anti-trust laws, product liability laws, optimized intellectual rights, cost of capital, federal tax regulations, environmental regulation, target markets, government subsidies, etc. Industry needs to take a more active role in coordinating a single industry voice to articulate industrys issues, not just individual company views. DoD acquisition policies need a major overhaul to take advantage of a planned change to move towards a unified industrial base. DoD needs to leverage commercial products, processes, practices, and technology. RAPID PRODUCT/PROCESS REALIZATION: Business practices to increase competitiveness focus on increased emphasis on rapid product introduction stressing time-based competitiveness, innovation on every front, and IPPD methodology including use of cross-functional Integrated Product Teams (IPTs) involving all stakeholders. FEDERATED R&D LABS: Establish a federated lab concept to partner with industry and academia to conduct collaborative research in a virtual and distributed environment. Establish independent peer review boards to oversee research. Conduct customer surveys of the quality and effectiveness of the research, build on own core competencies, and partner as appropriate to complement core competencies and expertise. INVESTMENT INCENTIVES: In a downsized economy, manufacturers, particularly in the defense industry, have insufficient funds to invest in manufacturing R&D and modernization to improve their manufacturing competitiveness. Creative ways of financing such investment need to be instituted, including partnering with other companies, leveraging government R&D programs, seeking new ways of acquiring capital, and taking short term earnings losses to reap future profits. VALUES AND EXPECTATIONS ALIGNMENT: Work with customers, suppliers, employees and other stakeholders to clearly define and align values and expectations early in a business relationship. Many values and expectations differ over various phases of a product life cycle and the position of each stakeholder in the enterprise. BENCHMARKING: Benchmarking is a strategic tool to identify best practices, discard ineffective practices, and re-engineer the enterprise to eliminate non-value added activities to be more globally competitive. Target costing is another tool/practice that needs to be instituted to balancing cost versus performance value. JUST-IN-TIME PHILOSOPHY: The U.S. auto industry in particular sees the advantage of managing justin-time inventory (JIT), incorporating the Japanese principles of kaizen. Inventory needs to be recognized as a cost of doing business, not an asset as our financial rules treat it. QUALITY IS A GIVEN: Quality needs to be considered as a given not a discriminator, in competing in the 21st century.
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4.2.2 Mid Term (5 to 10 Years) and Long Term (10 to 15 Years ) The majority of the business practice enablers identified will continue to apply in the mid- to long-term. Industry and government must support R&D to develop new ways to spur continuous improvement as well as continued improvements in workforce education and training. 4.3 Cultural Enablers 4.3.1 Near Term 0 to 5 Years WORKFORCE AND MANAGEMENT METRICS: Develop metrics for evaluating workforce and management systems INTERDISCIPLINARY PROBLEM-SOLVING: Establish an interdisciplinary approach to problem-solving characterized by teamwork and cooperation between scientists and engineers in industry, academia, and the national laboratories. VIRTUAL ENTERPRISES: Establish virtual enterprises that draw upon abilities of all members, not just management, and which establish focused teams and allow ownership of processes by employees. PARTNERING BETWEEN INDUSTRY, GOVERNMENT, LABOR, UNIVERSITIES, CONSORTIA: Industry must work with government, labor, universities, consortia, and customers to drive creation of new technologies and development of new applications. WORK TEAMS: Creation of internal and external work teams within an organization that empowers these teams to undertake ad hoc tasks is a key enabler. Work teams must also be provided with advanced groupware tools to support interaction among geographically dispersed locations. WORKFORCE REWARDS AND INCENTIVES: Improve workforce rewards and incentives, training (focused on retraining existing employees), job rotation, hiring criteria, and teaming to provide a more versatile, self-guided, competitive workforce. EMPLOYEE TRAINING: Advanced employee training will enhance worker productivity and innovation. Partnering with local communities on training and infrastructure needs will create a cost-effective environment for business and long-term stability in the quality and morale of the workforce. BETTER EDUCATED AND CERTIFIED EMPLOYEES: Better educated and certified operators and technicians will become cross trained as multi-machine tenders instead of single machine operators. TRAINING STANDARDS: Establish industry-wide training standards and strengthen the school-to-work transition. COMMERCIAL TECHNOLOGIES IN MILITARY SYSTEMS: Use commercial technologies in military systems COMPUTERIZED TOOLS AND STANDARDS: Use computerized tools and standards to reduce manufacturing intervals and errors and increase usage of total cost accounting and new technologies. 4.3.2 Mid Term 5 to 10 Years None identified 4.3.3 Long Term 10 to 15 Years None identified
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4.4 Environmental Enablers 4.4.1 Near Term 0 to 5 Years INFORMATION REPORTING SYSTEMS: Creation of information reporting systems that are able to provide insight into manufacturing processes so they can be made more environmentally safe and waste-free. ENVIRONMENTAL STEWARDSHIP: A mindset of environmental stewardship must be fostered throughout industry to create an atmosphere of environmental friendliness. Processes must be developed and applied to minimize energy usage and materials consumption. Key enablers identified include: solvent and refrigerant replacement, plastics recycling by repolymerization, biodegradable materials, clean metal plating and finishing, advanced absorption, thermal treatment methods, dry powder coatings, advanced cleaning technologies, solid waste reuse, process chemical recovery, metals speciation, air emissions reduction, improved chemical application, alternative cleaning technologies, creation of environmental decision tools, reengineering of non-value-added processes, development of process control systems for elimination of process waste and toxic emissions, reduction of nonrecyclables, and tagging technologies that promote recyclability upon product retirement. ENVIRONMENTAL LAWS, REGULATIONS AND PERFORMANCE GOALS: Base environmental laws, regulations, and performance goals on sound science and relative risk. ENVIRONMENTAL CONCERNS AND IMPACTS: Incorporate environment, safety, and health (ES&H) concerns and requirements up-front into materials, products, and process design tools, and provide for enhanced upstream and downstream ES&H impact analysis of manufacturing design and changes. COST EFFECTIVE CONTROLS AND STANDARDS: Develop and apply cost-effective cleanliness and environmental controls and standards. PUBLIC-PRIVATE COOPERATIVE RESEARCH: Encourage public-private cooperative research on key environmental concerns. SMALL BUSINESS PARTNERING: Provide mechanisms for partnering to develop clean pollution prevention technologies for small businesses. ENERGY DEMAND REDUCTION: Improve the fuel efficiency and emissions of all vehicles, aircraft, and ships, and reduce the demand for energy from engine and drive trains. 4.4.2 Mid Term 5 to 10 Years Key enablers identified for the 5- to 10-year timeframe include waste minimization technologies to reduce landfill and disposal costs; cost-effective retrofit of current technologies to minimize emissions, and industry access to an integrated knowledge base of ES&H management and technology best practices. 4.4.3 Long Term 10 to 15 Years None identified
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PART 2 INDUSTRY SUMMARIES
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1.0 AEROSPACE 1.1 Vision A strong aerospace manufacturing base is vital to the economic and military strength of the U.S. Emerging tools, processes, and technologies offer significant opportunities for reducing costs and improving performance of aerospace and defense systems. The future aerospace manufacturing base will be able to respond quickly and efficiently to government and commercial sector needs through application of agile engineering and manufacturing systems, seamlessly integrated flexible supply chains, and easy access to industry knowledge, data, and lessons learned. Breaking the present quality, speed, and cost/quality paradigms requires commitments to cultural change, integration of product and process manufacturing technology, and investments in people and technology. Allocation of resources between military (government) and commercial (industry) must be balanced to better support global competitiveness. Government and industry must reach consensus on Affordability Technology strategies and actions necessary to meet R&D challenges of the post-Cold War era. Integrated product planning must address process maturity and include affordability as a primary criterion. 1.2 Goals, Needs, and Drivers Near Term 0 to 5 Years Goals Re-deploy resources to advance trade, promote a strong aerospace industrial base, and promote technology application and development. Enhance resource use by increasing use of commercial practices, processes, and products, and by applying IPPD/IPT philosophy early in product realization process; focus resources on product, process and infrastructure technologies with maximum impact on affordability and time-to-market. Integrate manufacturing technology knowledge base and provide clear strategic vision and direction; integrate and leverage private sector resources, and provide more effective mechanisms for technology deployment to stimulate economic growth, competitiveness, and environmental and social responsibility. Configure laboratories to be preeminent in key areas of science, engineering, and analysis essential to customer missions, and serving as intellectual crossroads for technical communities. More closely integrate economic, foreign, and national security policies; coordinate a coherent defense manufacturing strategy to enhance affordability in creating, upgrading, and sustaining defense systems. Focus government re-engineering on organizations and processes rather than programs; better leverage commercial base for defense technologies, and better leverage defense technology investments to benefit nations economy. Reduce the size of government, strengthen the economy, and integrate the defense and commercial industrial bases. Clarify private/public sector roles, implement immediate and radical acquisition reform, and integrate industrial base factors into DoD processes to enable a self-sustaining R&D structure, stabilize defense market environment, and shorten time-to-market. Technical risk, producibility and affordability must be considered much earlier in the research and development process. Civil and military industrial bases must be more fully integrated. Rate production approaches must be augmented by a prototyping plus strategy that enables continuous development and cost-effective low-
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rate production of selected prototypes. This requires changes in procurement of spares and support services. Processes must be planned and implemented to achieve customer performance, quality, and target cost expectations through optimized producibility, application of statistical process control, development and use of commercial sources, and elimination of unique components. Operators must be trained and in place. Establish and sustain a stable, efficient production and support base that enables the operational capabilities to meet mission requirements; ensure ability to monitor and confirm quality and performance. Needs Reduce costs and cycle time across entire product life cycle, secure access to capital, expedite product introductions, and leverage joint venture opportunities to expand global market share and capture new market niches. Greater innovation in manufacturing, coupled with integration of information, materials, machinery, and human resources. Address manufacturing cost considerations early in design process and attack manufacturing infrastructure costs. Need to mature process technology concurrent with product technology, and invest in process innovation, process physics, pilot-lot scaling, and repair technologies. Balance increased global competition against shrinking market demand and increasing market segmentation. Adopt commercial practices and streamline management and control processes in defense complex to provide unified, efficient, dual-capable industrial base, with competition driven by value, not cost. Need to integrate and streamline acquisition and R&D functions and infrastructure among all agencies, with central coordination. Need to re-focus resources on enabling technology research, less on traditional fullscale product development. Reduce costs and cycle time across entire product life cycle, secure access to capital, expedite product introductions, and leverage joint venture opportunities to expand global market share and capture new market niches. Advance critical technologies to support more affordable, more capable systems; e.g., high-temperature materials, high-speed machining, superplastic forming, advanced composites. Quantum advances in key materials technologies including composites, metal alloys, and ceramics, and supporting process technologies including sensors, modeling, and process control. Increase supplier performance and competition through establishment of strategic relationships and flexible teaming. Advanced tools enabling IPPD coupled with standardization of products, processes, tool and information systems to eliminate barriers to productivity and interoperability. Integrate civilian and defense manufacturing bases to sustain capabilities at reduced cost while enhancing responsiveness and reducing costs, enabling focus of defense R&D resources on critical needs. Redesign/reengineer work practices for greater efficiency. Shorten product introduction cycle by 30% while extending product useful life and while maximizing use of commercial materials and parts. Address life-cycle concerns early in design with engineering approach based on multiple-product design techniques such as reuse and scaleability. Advanced metallic and composite materials development, materials standards and concurrent engineering protocols, manufacturing techniques for producing advanced materials with no life-cycle functional failure, and intelligent manufacturing systems.
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Drivers Ability to quickly deliver varied, feature-rich products and reliable service that respond to customer needs and wants. Ability to downsize/manage flexible workforce, reduce plant and equipment costs, and flexibly reconfigure enterprise through acquisitions and partnering at home and abroad. Dramatic changes in industry and environment, including radically downscoped production and inventories, uncertainty in long-term requirements, new emphasis on technology upgrades/insertion, new quality/affordability techniques, and new philosophies such as IPPD/IPT. International competition continues to intensify, with no long-term solution in sight for trade deficit. Defense and commercial sectors increasingly technology-dependent, particularly in electronics. The challenge of decreasing defense production requirements driven by realignment with post-Cold War realities and changing warfighting strategies, coupled with increasing global competition, will force mergers and acquisitions to ensure financial viability of technology-based enterprises. Drastic reductions in government/private R&D spending threaten future technology advantages, demand aggressive approach to preserving R&D base. Technology demands, fiscal constraints, and market pressures are continuing to raise the bar for U.S. manufacturers. Emerging global economy presents new market opportunities while increasing levels of risk and competition. Worldwide decline in defense spending is forcing all aerospace firms to look to export markets for survival and growth, increasing levels of risk and competition. Defense acquisition process is overburdened with regulation, imposing large penalties of cost and time in weapons development; leadership of technology development is fragmented, resulting in redundancy and inefficient use of resources. Aerospace will continue to be the driving force and primary user of advanced materials and advanced material processing technologies, which offer opportunities for increasing capability and reducing costs. Advances in infrastructure information systems, supplier integration, and flexible manufacturing offer greatest opportunity for quantum improvements in aerospace industry cost-effectiveness, responsiveness, and performance. Majority of product cost is locked in prior to production; investments in optimizing product and process up front will continue to have greatest impact on reducing cost. Pace of technology advances has greatly outstripped ability of defense industry to deliver state-of-the-art products. Keys to success are ability to shorten time-to-market and enable low-cost upgrades. Mid Term 5 to 10 Years Goals None identified Needs Integrated, single logical physically distributed data repositories and networks are mandatory for manufacturing competitiveness in future years. IPPD rules and tools and affordable manufacturing processes for advanced materials are the most critical in the mid-term. Other key needs include: Revise federal legal mechanisms to allow/encourage greater partnership and consolidation in product realization. Reverse low bid procurement mentality and institute best value system for contract award. Electronic data interface and electronic commerce using Internet to decrease paper and assure timely coordination. Modular systems (functional plug and play) are mandatory. New processes for ensuring domestic availability of critical parts and components. Commercial solutions to meet or exceed mission requirements of military products. Adopt established international specifications and standards for procurement.
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Drivers The economic reality within the aeronautics industry has created a reduction of both prime and component suppliers. Increased government regulation, involvement compounded by multi-national aeronautics trade patterns have had a devastating effect on this critical industrial sector. Long Term 10 to 15 Years None identified 1.3 Barriers Near Term 0 to 5 Years The barriers facing the aerospace industry are substantial. These include weak support for process technology development, product inflexibility, lack of mechanisms and methods to increase supply chain flexibility, and poor post-sales services. The federal government represents one of the greatest barriers. This is reflected in the instability of the DoD Manufacturing Science and Technology (MS&T) budget, lack of congressional/DoD cooperation, and a high-level of earmarked, congressionally motivated budget allocations. Reduction in federal support has limited commercial adoption of breakthrough processes and technologies. This condition is further impacted by increasing foreign standards, weakness in U.S. subcomponent manufacturing technologies, and federal/commercial technology validation. The lack of a U.S. direction in aeronautical modernization has led to poor health of subcontractors, limited emphasis on process technology, and minimal flexibility between product performance and manufacturing affordability. This is compounded by congressional/DoD budgetary conflicts. Barriers are also created due to short federal budget cycles, international cultural differences, non-related political considerations, and restrictions on U.S. aeronautic technology transfer. U.S. aeronautical dominance in enabling technologies has evaporated. The DoD is bureaucratic in habits and leadership, which has led to difficulty in properly selecting, maturing, and managing technology. Burdensome contracting and accounting procedures, unique specifications, and processes do not support common values and expectations. Federal laws and regulations dramatically and adversely affect product affordability, risk, and complexity of products. These include data rights, government vs. commercial specifications, lack of benefits of common parts, and resistance to change. International economic and cultural realities present further barriers. These include currency exchange rates, lack of cash by third world purchasers, volatile political environments, and privatizing critical defense facilities. A significant barrier lies in the area of understandings between federal agencies and private contractors. There are four major barrier areas:. 1) Achieving a holistic, life-cycle approach to product manufacturing in the areas of a) design to cost decision making (affordability), b) fragmentation of related programs and contracts, c) the effects of early conceptual product requirements. 2) Teaming and enterprise partnering methods, practices and skills, customer and suppliers are not adequately involved in the conceptual design phase. 3) Technical, interoperable interfaces between enablers including CAE, CAD, CAM, CAT, and CAI. 4) Human resources from educational institutions are inadequately prepared for job performance.
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1.4 Enablers Technology Enablers Near Term 0 to 5 Years Product Enablers One of the most significant technology enablers is integration of information technologies in all areas of the product life cycle, including design, use of standard parts and components, increased robotics, and better production process technologies. Two significant material technology areas need substantial support: low observables and advanced materials such as composites and superalloys. DARPA projects considered critical to technical advancement include: high-definition flat-panel displays, Rapid Prototyping of Application-Specific Signal Processors (RASSP), Infrared Focal Plane Array (IRFPA) Flexible Manufacturing, Interferometric Fiber Optic Gyroscope (IFOG), Active Electronically Scanned Arrays (AESA), and Affordable Multi-Missile Manufacturing (AM3). Other federal initiatives that will contribute substantially as technology enablers include: two-dimensional optical processor, 1000 lines/inch electroluminescent display, and the intelligent vehicle initiative. To enhance product affordability, the following considerations must be emphasized: design for upgradability and multi-role use in the original design, greater use of commercial parts, and continuing advances in power transistors and solid state circuits. Process Enablers There is an extensive list of technology processes needed in aeronautics to provide substantial competitive advantage. These include fiber and resin processes, advanced part fabrication methodologies, process control, superalloy forming and joining, high-temperature coatings, radiation hardened electronics, process physics, math-based processors, process integration processes, and autoscheduling processes. Other advanced macro process required for future competitiveness have wide applicability in aeronautics and other industrial sectors, including: a synthesis tool for optimized digital components, integrated satellite ISDN, adhesive bonding, resin transfer bonding, and a composite delamination process. Advanced materials and associated affordable technologies and processes will be essential to a robust aeronautics sector. Some emerging examples are: high-temperature ceramic matrix composites and processes, titanium aluminide alloys and processes, super plastic forming and diffusion bonding and processes, electromagnetic technologies processes, automated/intelligent coating process technologies, and near-net shape machining and forming processes. Control of advanced process variability is essential to quality, defect control, and process entrance and exit criteria. A strong effort must be initiated in simulation and modeling of both business and manufacturing/distribution processes to assure first time success on low-volume, affordable, highly complex, and variable products needed by aeronautical sector customers. Advanced simulation, information management, process and product development, sensors, controls, and metrology will be performed in an agile, intelligent and environmentally conscious fashion. Infrastructure Enablers The U.S. aeronautics industry, both commercial and military, competes internationally. It is essential therefore that the U.S. infrastructure be integrated and expand far beyond current regional alliances. The U.S. must have mechanisms for monitoring and evaluating international technology and political trends. As well as advanced manufacturing technologies, it is overwhelmingly understood that two critical advanced enabling technologies be accelerated: integrated information systems and product/process simulation and modeling. The latter will require considerable effort to mature. For example, product/process simulation and
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modeling must be enhanced to provide future predictions and decision impact, and a real-time repository of R&D technologies, programs, and initiatives and manufacturing industrial efforts. Business Practice Enablers Near Term 0 to 5 Years Many aeronautical organizations are employing innovative business practices to achieve cost, time-to-market, and quality improvements. Some of these practices include: 1) Focus on enhanced serviceability, aesthetics and features; 2) Emphasis on rapid product deployment processes; 3) Decreasing the number of suppliers; 4) Supplier productivity improvement program; 5) Strategic alliances; 6) Increased worker involvement; 7) Interfunctional communications processes; and 8) Long-term manufacturing strategies. The government has a key role in providing a competitive environment for the aeronautics industry. This role is intended to level the playing field, not provide national favoritism. Two actions can be taken to immediately infuse competitiveness within the aeronautics industry. The first action is to use IPPD, IPT, and target costing in the conceptual phase of product definition. The second effort is to increase and sustain funding for MS&T. Developing benchmarks and metrics to evaluate the effectiveness of manufacturing improvements is another key enabler. The aeronautics industry can further leverage its internal R&D by partnering in cooperation with the federal laboratories. The U.S. federal laboratories offer expertise and experience which can greatly assist commercial industry. Three strategies have been demonstrated to help in formulating a successful and competitive aeronautical extended enterprise: 1) Dual military/commercial use, 2) Use of IPPD and IPT in early design phases and extending through production; and 3) Deployment of manufacturing technologies in advance of production needs. Government policy to promote aerospace technology development and application should provide adequate levels of aeronautics R&D, cooperate with industry in setting aerospace R&D priorities, include an affordability and agile manufacturing strategy, take an integrated approach to environmental regulation, establish engineering education programs better suited to industry needs, and create incentives for investment in new technology. There are specific actions or tasks and activities which have been proven to enhance competitiveness within the extended enterprise. The most significant of these include target costing (pricing) and benchmarking. Culture Enablers Near Term 0 to 5 Years The two most important culture enablers are people and knowledge. Within people lie the management skill and organization of the enterprise. Assets include autonomy of authority and responsibility, minimal bureaucracy, and establishment of competence. Leveraging these enablers requires: Innovative workforce education and training Extensive autonomy for managers Short command chain Minimal bureaucracy Rely on competence of program managers Rotation of knowledgeable people as programs change Willingness to allow suppliers to choose their own approaches to accomplish tasks.
A competitively successful enterprise draws upon abilities of all members, not just management. Focused teams and ownership of processes by employees is essential to realizing this cultural change. Environment Enablers None identified
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2.0 AGRICULTURAL 2.1 Vision The U.S. food industry will be globally competitive in providing nutritious, safe, satisfying, and value-added food products through leadership in environmental management and technologically superior manufacturing processes. The U.S. forest products industry will be a global leader in providing safe, environmentally friendly, low-resource-intensive and sustainable manufacturing. 2.2 Goals, Needs, and Drivers Near Term 0 to 5 Years Goals Improve food processing technologies to provide more effective measures for weight control, faster scaleup, lower capital investment, reduced energy and water usage, decreased hazardous material usage, and increased product yield. Enhance competitiveness vs. developing countries and respond to public expectations through advances in sustainable forest management, environmental performance, energy performance, capital effectiveness, recycling, and sensors and controls. Needs The agricultural and forest products industry needs innovative techniques and integrated systems and equipment to enhance process performance and reduce costs; reduce water, energy usage, and packaging waste; and improve waste treatment and disposal. Additionally, basic interactions on the molecular level between food and processing steps need to be understood in more fundamental ways. Increased understanding of heat recovery; wood fiber; tree growth characteristics; and product mechanical and optical properties, including computer-based tools for performance modeling and demonstration, are required in the wood products sector. Drivers Major drivers include decreasing resources, increasing foreign competition, and increasing regulation. Long Term 10 to 15 Years Goals In 2020 the U.S. forest, wood and paper industry will be the world leader in providing safe and essential products in harmony with the environment and will be a sustainable contributor to our nations economy and quality of life. Needs None identified Drivers None identified
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2.3 Barriers Near Term 0 to 5 Years A lack of basic longer-term new technology research has led to the view of the industry as low tech by government and research organizations. Few collaborative efforts exist between government and the food industry, which limits opportunities for substantive advances. Regulatory requirements also present barriers to attaining performance and market goals; the lowest-cost, fastest-compliance track may not be the optimum long-term solution to meeting environmental goals. 2.4 Enablers Technology Enablers Product Enablers Technologies that improve product performance and environmental acceptability Technologies that improve energy efficiency Technologies that enable improved capital effectiveness cheaper to use, less expensive to maintain, and better able to stand up to process demands and stressful environments Recycling - Separation and recovery of fibers will enable the successful incorporation of fibers in pulp and paper products Sensors and control - sophisticated real-time measurement and control systems for environmental monitoring, process control, and product quality. Process Enablers Advanced food industry processes will be enabled by advanced process design and analysis techniques, energy efficient reduced water processes, in-process sensors, and computer-integrated management and process control Processes that enable sustainable forest management Processes that minimize waste and enhance environmental performance Energy Performance - Energy use and production technologies must be improved as well as the development of new techniques to extract maximum energy from waste streams Processes that improve capital effectiveness, such as alternatives to black liquor gasification and to forming, pressing and drying technologies for paper and wood products; and methods for constructing large and small facilities. Business Practice Enablers None identified Culture Enablers None identified Environment Enablers Environmental policies and regulations will be developed with the aid of multimedia environmental control optimization and modeling for lowest total environmental impact which specifically address requirements of the food industry.
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3.0 AUTOMOTIVE 3.1 Vision World-wide, the automotive industry has found new ways to compete and new ways to think about competing. New global competitive pressures and advantages are emerging and evolving; the winners have changed everything: product design, process technology, organizational structure, and strategic direction. Performance will improve significantly by focusing on invisible production: people, technological knowhow, supply chain relationships, and agile organizations; and by reducing costs and improving customer satisfaction through implementation of rapidly changing technology in design and manufacturing. 3.2 Goals, Needs, and Drivers Near Term 0 to 5 Years Goals Integration and validation of manufacturing systems and technologies across the value chain by focusing on soft technologies to migrate commercially viable technologies to the manufacturing floor. Improve design and development process to improve lead times, delivery performance, and achieve cost reductions. New production processes, manufacturing and assembly systems will be developed that increase product reliability, throughput, and cycle time while decreasing production costs and duplication. Increase world market share of automotive business by forecasting human resource issues, implementing lean manufacturing techniques, and producing cars with local customer appeal. Create more fuel efficient and recyclable automobiles. Needs Understanding of basic processes of successful business competition and better knowledge of the customers needs Competitive, trained, and educated workers in the face of global competition Epochal innovations in vehicle design, manufacturability, and maintainability Enhanced product maintenance, lower repair costs, lighter weight, improved fuel efficiency, less aerodynamic drag and tire rolling resistance, and more efficient mechanical and electrical components Advanced engine technologies using alternative propulsion technologies to combine high-power density with low emissions Intelligent manufacturing cells, rapid prototyping, advanced automated welding processes, manufacturing process and tooling integration, in-process inspection, and process modeling and analysis Process and business flexibility supporting a broad range of customized product options and supplier partnerships. Drivers Increased customer expectations and integration into industry supply chain, environmental factors Collapsing of the supply chain is reducing the time to market for new product Shifting cost structures Technology implementation is beginning to be driven by need and not sophistication recyclability and manufacturing are the greatest challenges Awareness of importance of worker knowledge and knowledge workers
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Increasing plant capacity Rapid globalization of the world auto industry global trade agreements, environmental regulations, and international standards are altering the way business is conducted throughout the world. 3.3 Barriers Near Term 0 to 5 Years Long product introduction and changeover cycle times Limited benefits of technology implementation due to poor product and process integration Specifically competent workers for tomorrows technological factory are not now available and the short term forecast shows low potential for improvement Poor economic performance of U.S. firms in the world market Short-term leadership Mediocre products not tuned to market segments Differing government regulations across global markets Resistance to change due to company size and imbedded culture. 3.4 Enablers Technology Enablers Near Term 0 to 5 Years Product Enablers Lightweight aluminum, plastic, and smart materials will be used to improve acceleration, drive-ability and customer satisfaction. Energy conservation and conversion systems will decrease energy usage and level energy demand in the automobile. Specific technologies identified are regenerative braking to recapture energy, flywheel systems, and ultracapacitors. Advanced propulsion technologies will be developed, including advanced internal combustion engines, fuel cells, lean burn internal combustion engines, gas turbines, and hybrid propulsion systems. Specific technologies considered to expand are port fuel injection, four valves per cylinder, single and dual overhead cam penetrations, and distributorless ignitions to increase. Information systems and computer technology will provide better control of the manufacturing process across the integrated supply chain. Integrated vehicle design will include engineered components by suppliers. Vehicle electronic content expected to continue to increase. Flexible, automated manufacturing will be utilized to produce high-volume, low-cost product with a high degree of customization. Process Enablers Design technologies including sophisticated simulation systems for testing complex research designs, design and analytical methods to determine strength characteristics, and value engineering process improvements. Better understanding friction, wear, and lubrication in materials, components, and engines in design. NOx reduction catalyst development. Manufacturing technologies including flexible and agile tooling and equipment, process control for laser beam welding, and intelligent welding to improve performance, longevity, maintainability, and environmental friendliness of products. Advanced simulation, information management, and process and product development will be performed in an agile, intelligent, and environmentally conscious fashion.
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Infrastructure Enablers Advanced computing and industry standards to facilitate integration of design to production floor manufacturing in a virtual and agile environment, rapid prototyping, programmable automation and intelligent process control. Business Practice Enablers Near Term 0 to 5 Years Increased emphasis on rapid product introduction; time-based competitiveness; innovation on every front, from product and process improvement to human resource development and management; and understanding of customer requirements Ability to deliver greater variety of mass customized products rapidly and affordably; ability to manufacture and assemble off-shore, conduct engineering and product R&D off-shore, and penetrate foreign markets Practices to ensure a skilled workforce: performance based compensation, career ladders for nondegreed engineering technicians, top recruiting from the best universities and community colleges, using state sponsored pre-employment qualifications; retraining current non-core employees for core employment Emphasis on education and training, including reform of public education to meet needs of industry; commitment by states to train current employees to compete and reform education to become competitive Consortium R&D strategies and improved North American market opportunities Leveraging of external resources supply chain, government, and dealer network Rethinking design and manufacturing processes worldwide and redeploying workforce, coupled with more affordable and adequate health-care and other benefits Operational flexibility, workforce flexibility, and reduced cost of benefits through partnering with suppliers and competitors. Mid Term 5 to 10 Years None identified Long Term 10 to 15 Years An integrated team from top management to line worker will form a unit that can respond instantly to customer needs. Culture Enablers Near Term 0 to 5 Years Improved workforce rewards and incentives, training (focused on retraining existing employees), job rotation, hiring criteria, and teaming will provide a more versatile, self-guided, competitive workforce. Mid Term 5 to 10 Years None identified Long Term 10 to 15 Years Societal understanding of the true nature of greenhouse effect. Environment Enablers Development of a green car with built in recyclability and remanufacturability.
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4.0 BIOMEDICAL 4.1 Vision No specific vision was identified in the research effort. 4.2 Goals, Needs, and Drivers Goals None identified Needs The biomedical industries need to develop better vaccines, protectants, therapeutics, monitoring and diagnostics techniques, radioprotective strategies, early prognostic physiological indicators, modeling, pharmacological control techniques, neurophysiological control techniques, psychophysiological adaptations for manmachine interfaces, risk assessment, and hazard determination. Critical technology needs include bioactive/biocompatible materials, bioprocessing, and new drug discovery techniques. Drivers None identified 4.3 Barriers None identified 4.4 Enablers Technology Enablers Product Enablers Vaccines, antibiotics, data collection and management systems, and bone repair and diagnostic devices. Process Enablers Specific process technologies identified include advanced triage diagnostics, sensors, and intelligent systems, blood substitutes; noninvasive physiological sensors; ventilatory support equipment; intelligent medical decision-making systems; nerve agent countermeasures; and radiation injury treatments. Infrastructure Enablers None identified Business Practice Enablers None identified Culture Enablers None identified Environment Enablers None identified
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5.0 CHEMICAL 5.1 Vision The chemical industry developed a vision of the future in which: A continued investment in technology is necessary to meet the needs and expectations of the next generation for the chemical industry. People, technology, capital, information, and products will move freely across international boundaries, minimizing, and sometimes equalizing, past economic and technological disparities. Worldwide economic growth offers many new opportunities for selling products and services in countries previously inaccessible because of geography. To compete effectively in foreign markets, local manufacturing is important and will increase the potential market for U.S.-owned foreign affiliates. 5.2 Goals, Needs, and Drivers Goals The U.S. chemical industry has identified five broad goals it must achieve over the next 25 years: Improve operations, with a focus on better management of the supply chain. Improve efficiency in use of raw materials, reuse of recycled materials, and generation and use of energy. Continue to play a leadership role in balancing environmental and economic considerations. Aggressively commit to longer-term investment in R&D Balance investments in technology by leveraging the capabilities of government, academia, and the chemical industry as a whole through targeted collaborative efforts in R&D.
Needs 1) New Chemical Science and Engineering Technology. Chemical science is the most fundamental driver of the chemical industry. Maintaining and improving the competitiveness of the U.S. chemical industry requires advances in three areas: chemical synthesis, bioprocesses and biotechnology, and materials. Enabling technologies include process science and engineering technology, chemical measurement, and computation. 2) Supply Chain Management. The chemical industry has concentrated on science and production and also has given substantial attention to manufacturing, but has given less attention to the supply chain. Many estimate the costs associated with supply chain issues to be approximately 10% of the sales value of delivered products domestically and as much as 40% internationally. 3) Information Systems. Throughout the chemical industry, the ways in which data are turned into information and used, managed, transmitted and stored will be critical to its ability to compete. Improved and enhanced information systems are at the heart of the chemical industrys vision, which sees the industry operating highly efficiently and economically. 4) Manufacturing and Operations. The revenue-generating capability of the chemical industry is derived from its capability to deliver chemicals and materials that satisfy customer needs. Manufacturing operations play a key role in that activity. Maintaining and improving the competitiveness of the chemical industry will require advances in six areas of manufacturing operations: customer focus, production capability, information and process control, engineering design and construction, improved supply chain management, and global expansion.
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Drivers Five major forces are shaping the chemical industry business future: Increasing global markets Societal demands for higher environmental performance Financial market demands for increased profitability and capital productivity Higher customer expectations Changing workforce requirements.
5.3 Barriers Most of the barriers were mentioned as needs. However some challenging trends were noted: Federal expenditures on non-defense R&D have fallen as a percentage of the GNP over the past 3 decades. In non-defense R&D, which has more impact on the U.S. chemical industry, the U.S. outspends only France. Government expenditures influence the level of private support for applied R&D. This applied research can only proceed in directions indicated by basic research, and commercialization follows from applied research. Companies appear to be shifting their investments to shorter-term R&D. Economists forecast an inevitable decline in the U.S. share of world output and trade. The emphasis on short-term profitability has improved stockholders satisfaction, but is a significant barrier to funding long-term R&D. 5.4 Technology Enablers New chemical science and engineering technology is the fundamental driver of advances within the chemical industry. Enabling technologies in maintaining and improving the competitiveness of the U.S. chemical industry requires advances in areas of chemical synthesis, bioprocesses and biotechnology, and materials technology. The specific technology areas are 1) process science and engineering technology, 2) chemical measurement, and 3) computational technologies. Supply chain management is the critical link between the supplier, the producer, and the customer. Supply chain elements requiring technology advances are: 1) planning and processing orders; 2) handling, transporting, and storing all materials purchased, processed, or distributed; and 3) managing inventory. Primary technologies supporting this area are information flow, communications, and database management. Information systems are critical to competition and involves the ways data are turned into information and used, managed, transmitted, and stored. Manufacturing and operations play a key role in the capability to deliver chemicals and materials that satisfy customer needs. This requires advances in six areas: 1) customer focus; partnering with emphasis on reliability of supply, product quality, and responsiveness to change; 2) production capability to improve process safety and to reduce the impact of manufacturing processes and products on the environment; 3) information and process control to speed up access to product and process information and to enable communications across the supply chain; 4) engineering design and construction to develop the technology to build plants quicker at lower costs and allow reconfiguration as markets change; 5) improved supply chain management giving it a chemical industry focus; and 6) global expansion to expand the capability for global operations and commerce.
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5.5 Business Practice Enablers The chemical industry, as the employer of 10% of the U.S. manufacturing workforce, identified and roadmapped enterprise steps needed to meet the industry challenges. Generate and use new knowledge by supporting R&D focused on new chemical science and engineering technologies to develop more cost-efficient and higher performing products and processes. Capitalize on information technology by working with academia, federal and national laboratories, and software companies to ensure compatibility and to integrate computational tools used by the chemical industry. Develop partnerships for sharing information on automation techniques and advanced modeling. Encourage elimination of barriers to collaborative pre-competitive research by understanding legislation and regulations that allow companies to work together during the initial phases of development. Work to improve the legislative and regulatory climate by the reform of programs that emphasize performance rather than a specific method of regulatory compliance, and a greater consideration of cost, benefits, and relative risk. Improve logistics efficiencies by developing new methods for managing the supply chain and by sponsoring an effort to shape the information technology and standards to meet the industrys manufacturing and distribution needs. Harmonize standards, where appropriate, by working with governments within the U.S. and internationally, and with independent standards groups on nomenclature, documentation, product labeling, testing and packaging requirements. Increase agility in manufacturing by planning manufacturing facilities capable of responding quickly to changes in the market place using state-of-the-art measurement tools and other technologies for design, development, scale-up and optimization of production. Create momentum for partnering by encouraging companies, government, and academia to leverage each sectors unique technical, management, and R&D capabilities to increase competitive position of the chemical industry. Encourage educational improvements through advancement of strong educational systems and by encouraging the academic community to foster interdisciplinary, collaborative research and provide baccalaureate and vocational training through curricula that meet the changing demands of the industry. 5.6 Cultural Enablers Because of all the forces creating change in industry, particularly those having to do with the nature of the manufacturing process and facilities, more highly skilled workers will be required for tomorrows workforce. The hallmark of the future workforce will be flexibility. Worker training is an ongoing part of every employees career, which has implications for educational curricula and programs for the future. Advances depend on enhanced collaboration among scientists and engineers working in fundamental and applied research and catalytic science relevant to commercial processes and products. Education and training curricula for chemists should be restructured, refocused, and intensified to highly integrate the disciplines of biology, biochemistry, physics, and computational methods. 5.7 Environmental Enablers Environmental technologies make sustainable development possible by reducing risk, enhancing cost effectiveness, improving process efficiency, and creating products and processes that are environmentally beneficial or benign.
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6.0 CONSTRUCTION 6.1 Vision Future great manufacturing companies will understand their processes deeply and manufacture with virtually no disruptions. They will employ a multi-skilled, continuously trained, highly committed workforce. The company will integrate seamlessly with suppliers and customers as well as design and manufacture with a full understanding of the cost savings and environmental benefits of eliminating waste and pollution. Additionally, the enterprise will move information and production quickly around the globe, leveraging technology and capacity. Finally, the future firm will grow and compete on learning and knowledge as well as speed, quality and price. 6.2 Goals, Needs, and Drivers Near Term 0 to 5 Years Goals The goal of the U.S. construction industry is to compete globally with U.S. based manufacturing using world-class performance achieved through concentration on core competencies and deliberate management of technologies. Requirements in reaching the goal include enterprise-related elements in understanding impacts, gaps, and interrelationships of technologies and supply (value) chains, along with automation, information flow tools, simulation and modeling, and structural materials (lightweight materials, alloys, processes, composites). Government goals also include lightweight power generators, virtual training capabilities, and logistical support elements in shipping. Needs No industry needs were identified in documents reviewed. Government needs include mission planning and execution information flow/modeling technologies that are both faster and less manpower intensive for mobility/countermobility survivability and general engineering missions; logistical elements in shipping, cargo handling, pavement design and materials, and easily deployable facilities. Drivers Industry bases its drivers on profitability and cash flow. Supporting this emerging influences that are causing rapid change in enterprise viability. These include the change in customer expectations of rapid response, adaptability, product and service personalization, and related support necessitating investment in manufacturing processes enabling world-class performance. Mid Term 5 to 10 Years Goals Government mid-term goals include reducing acquisition, maintenance, and repair costs; reduction of energy consumption; developing advanced fuel cell power generators; and providing virtual training capabilities in fire fighting and logistical support elements in shipping and cargo handling. Automation, information flow tools, assessment models, simulation and modeling, and structural materials (lightweight materials, alloys, stealthy structures, processes, composites) are key areas for capability improvement. Industry has not identified goals for the mid- to long term. Needs Government expressed needs in mission planning and execution information flow/modeling technologies that are both faster and less man-power intensive for mobility/countermobility survivability and general engineering missions; logistical elements in shipping, cargo handling, pavement maintenance/repair/design and materials, and easily deployable facilities. No industry needs were listed in documents reviewed. Drivers None identified
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6.3 Barriers Near Term 0 to 5 Years Barriers are primarily technical and include the development of lightweight, high-strength, high-ductility, and/or innovative adaptive construction materials and criteria including characterization of nonlinear, viscoelastic, viscoplastic material response under dynamic loading, and development of three-dimensional, coupled analytical software for accurate assessment of mobility and structural response. Development of innovative construction concepts for mobile military operations, and advancement of understanding of the physics of fire and extinguishing mechanisms also present significant barriers to improving capabilities. Mid Term 5 to 10 Years The government listed barriers were primarily technical and included the development of lightweight, highstrength, high-ductility, and/or innovative adaptive construction materials and criteria including characterization of nonlinear, viscoelastic, viscoplastic material response under dynamic loading, development of threedimensional, coupled analytical software for use in accurate assessment of mobility and structural response. Also itemized were development of innovative construction concepts for mobile military operations, and advancement of understanding of the physics of fire and extinguishing mechanisms. Long Term 10 to 15 Years None identified 6.4 Enablers Technology Enablers Product Enablers Industry enablers include enhanced equipment and real time process control for better weld joints, reduced variability in alloys, and enhanced laser and plasma coupled with adaptive forming. Process Enablers Technology process enablers include integrated product/process development modeling and simulation, algorithms for mobility, physics, and knowledge, as well as diagnostics and modeling for structures and virtual reality for training fire fighters. Also, physical processes for corrosion resistance and new uses for materials with structural strengths adequate for civil engineering needs. Infrastructure Enablers None identified Business Practice Enablers Business practice enablers addressed by industry include maintaining a focus on core competencies and strategic technologies for in-house ownership. Effective enabling elements include understanding, defining, and communicating manufacturing processes and the use of the value chain (extended enterprise) in a balanced (long- and short-term) financial achievement strategy for an overall product life cycle. Metrics must be used that drive the right behavior, asset management (ROA), agility and virtual groupings, cash flow (dealer and enterprise), and workforce structure. Culture Enablers None identified Environment Enablers None identified
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7.0 ELECTRONICS 7.1 Vision For the electronics industry, the new global reality means an environment that is more competitive than ever. Global strategies are developed at company formation; success depends on innovation, time to market, flexible organizational structure, and a creative approach to alliances with unlikely partners. All borders are fluid as the virtual enterprise shows promise as a powerful competitive strategy. The key to U.S. success in this highly competitive, rapidly advancing, and technology-driven industry is development of new breakthrough technologies that can create new markets in which the U.S. can be globally competitive. The nation must therefore receive maximum value for its investment in semiconductor R&D. 7.2 Goals, Needs, and Drivers Near Term 0 to 5 Years Goals Enable U.S. commercial electronics companies to better compete globally. Enable U.S. military electronics industry to use a single, dual-use industrial base for both commercial and defense to enable more affordable weapon systems taking advantage of commercial R&D, processes, and products. Continued leadership in research and development. Needs The following items are identified as critical manufacturing technology need areas:. Display materials Electronic ceramics Electronic packaging materials Gallium arsenide Magnetic materials Optical materials Photoresists Silicon Superconductors Logic chips Memory chips Microprocessors Submicron technology Actuators Sensors Laser devices Photonics Multichip packaging systems Printed circuit board technology Electro-luminescent displays Liquid crystal displays Plasma and vacuum fluorescent display Electro photography Electrostatic Magnetic information storage Optical information storage Applications software Artificial intelligence
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Computer modeling and simulation Expert systems High-level software languages Software engineering Hardware integration Neural networks Operating systems Processor architecture Animation and full motion video Graphics hardware and software Handwriting and speech recognition Natural language Optical character recognition Data representation Retrieval and update Semantic modeling and interpretation Broadband switching Digital infrastructure Fiber optic systems Multiplexing Digital signal processing Spectrum technologies Transmitters and receivers Re-usable software Multi-media systems Micro-electromechanical systems (MEMs) Compression technologies.
Other needs identified include:. Regain world-wide technology leadership position in advanced semiconductor devices More effective and efficient innovation management, product development, and management of suppliers and customer value chain Improved integrated manufacturing hardware and software systems, improved robotics, environmentally conscious processes and systems, improved flat panel display technology, and higher precision optics and soft X-ray lithography Closed-loop predictive process control of all applicable processes Fault-tolerant self-checking software that is generic and interoperable across all domains Systems-based management with integration of design of experiments, statistical process control, just-intime, benchmarking, best-in-class, self-directed work teams, empowerment of workers, customer/supplier partnerships, and continuous training and education Environmentally friendly, safe manufacturing Simplified efficient manufacturing processes, equipment, and tooling. Drivers The rapidly changing technology capabilities within the electronics sector mandate continuous insertion of new functions, materials, equipment, and techniques into industrial base factories. Electronics is the major growth area in the U.S. economy in terms of employment, output, exports, and innovation. Foreign Governments provide financial subsidies, low-cost capital, and encourage industry- friendly practices, regulations, and policies to facilitate penetration and domination of certain targeted industries that create jobs and pay taxes, to enhance their respective countries overall standard of living. These practices are making it increasing difficult for the U.S. electronics industry to compete in the global market. Other key drivers of this industry include: Continuous product life-cycle cost reduction and quality product/service enhancements are givens in tomorrows globally competitive electronics marketplace. Key growth technology areas are displays, MEMS, optoelectronics, power supplies, semiconductors, sensors, and superconductors. The vertical food chain industries within the electronics sector are linked technologically and economically. Smaller, leaner more innovative technology firms will take global leads in key market niches. Electronics will continue to be highly capital-intensive. Mid Term 5 to 10 Years Goals Exploit U.S. market leadership in communications and information sectors to secure a sustainable worldclass advantage for the U.S. electronics manufacturing. Needs Low dielectric constant, low-loss, low-cost, high-temperature, low-strain, light, and thin organic materials; e.g., tetrafunctional and BT epoxies, cyanate esters, etc. Deposited dielectrics capable of lithographically formed features High-resolution, low-cost materials for pre-application of solder onto PWBs Low-cost, high-density integration of passive components into PWBs Improved capability in dry film and liquid photo resists and environmentally friendly etching solutions Precision U.S. made PWB fabrication equipment
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Low-cost, high-electrical performance film materials capable of being processed on volume reel-to-reel lithographic systems Improved integrated circuit-to-display assembly technology, such as chip on glass Large area, low-defect photo resists and low-environmental impact cleaning and etching materials Integration of semiconductor packaging with technologies on both sides of the electronic food chain; e.g., chip on board, tab on board, flip chip on board, chip on glass Low-stress, high-purity molding compounds, and fine pitch, low-cost lead free materials High-resolution, no clean, lead-free solder pastes Ozone-friendly cleaning materials High-conductivity, high-resolution, isotopic and anisotopic conducting organic adhesives Low-stress, low-ionic, direct chip attach encapsulants Automated equipment for placing finer pitch QFP and flip chip die attach Adaptive controlled, improved ambient control reflow furnaces High-density battery cell materials: nickel metal hydride, rechargeable lithium, pseudo capacitor, etc. Tools and methodologies to better couple device design to package design to allow trade-offs for tolerances, coupling, cost reduction. Drivers Ability to regain, maintain, and increase market share Increasing miniaturization, increased use of advanced sensors, increased speed, increased flexibility, automatic programming, environmental constraints, and improved yield and quality Evolution from technology push to customer pull; from vertical integration to the virtual enterprise; from a domestic focus to a global outlook; from hardware-driven to software-driven; from a proprietary systems to industry standards, integration, and open systems; and from centralized mainframe processing to decentralized, networked PC processing. Long Term 10 to 15 Years Goals None identified Needs Reduced cost and improved availability of capital for start-up companies and for manufacturing equipment/systems with long-term payoff Improved mechanisms for technology transfer Software engineering tools and algorithms for managing complexity Integration of individual process and device technologies; dielectric materials 45 to 50 angstroms thick, interconnect capacitance-related cross talk, drive, and power dissipation technologies Low-cost lithography. Drivers None identified
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7.3 Barriers Near Term 0 to 5 Years There are a number of critical technology barriers (product, process and/or infrastructure) that must be overcome before the U.S. can achieve certain goals that could have a significant impact on realizing global competitiveness. Sequential development cycle, particularly in DoD products but still prevalent in most commercial products, imposes time and cost penalties on manufacturability, producibility, reliability, maintainability, supportability, and disposal impacts. In most every functional domain, in most every enterprise, at all levels, everyone works in individual silos, regardless of the activity. Similarly, there is insufficient integration between mechanical, electrical, thermal, and environmental technical domains at a part level, let alone at the next higher assembly levels, and at the end product/service level between software, hardware, and information. There are an insufficient number of international standards that are tailorable yet sufficiently robust that form, fit, and function technical criteria can be achieved from a broad base of commodities and/or suppliers to ensure integration. There are a number of high-cost items (activities, processes, materials, components, assemblies, products) that need order-of-magnitude cost reduction to be more universally useable. The non-level global playing field with regard to foreign government subsidies, cost and availability of capital, and industry-friendly practices, regulations, and policies continue to dominate key industries that create jobs, generate taxes, and enhance overall standard of living. Two separate industrial bases exist and are not well integrated: one dedicated to supporting DoD with different acquisition regulations, policies, and practices including military-unique technical specifications and standards; and one dedicated to the commercial industry, ignoring anything that DoD does for fear of corrupting the commercial base, including DoD technology that might otherwise be of high value. The U.S., both DoD and commercial industry, are investing considerably less in R&D and capital than their foreign country counterparts. The U.S. is slower than the rest of the world to transfer technology to development and to production between and within companies and industries. The U.S. has a greater Not Invented Here mentality. Other key barriers identified include: Insufficient vertically integrated OEM/lower-tier supplier base; particularly since much of the breakthrough critical technologies in electronics are realized at the material/component. Insufficient techniques to measure and metrics themselves needed to optimally evaluate and manage a process, company, enterprise, etc. Traditional reliance on technology growth can no longer provide the solution to system reliability. Systems are becomingly increasingly more complex and technology obsolescence is increasing faster. How-to performance only acquisition specifications, prevalent in DoD and still used by commercial OEMs, restrict development organizations from exploring effective but less costly alternatives. Manufacturing process variability is not well understood. Too much focus on product-only requirements, insufficient understanding of the environment and related services required that the product must function in and/or the product life cycle must impact. Lack of total employee involvement (self-managed teams contributing to high-level decision making). Mid Term 5 to 10 Years Inadequate software engineering tools and algorithms for managing growing complexity of all levels of design and test, from individual chips to complete systems Lack of dielectric materials suitable for gates 45 to 50 angstroms thick Difficulty in shrinking memory cell size
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Interconnect capacitance-related crosstalk; drive and power dissipation problems High cost of lithography Lack of access to multiple silicon sources Lack of standards, diagnostics and metrology for increasing higher density chips/systems Excessive regulatory requirements, especially with regard to the rest of the world Poor embedded software development and control methodologies Lack of focused semiconductor equipment thrust Inadequate software supplier base for semiconductors Cost-effective material reclamation of gases, fluids, and disposables Lack of good generic virtual factory facility models Validation of the molecular contamination models at the flow and device levels Lack of process characterization tools Lack of availability of cost-effective known-good-die for MCM, chip-on-board, and chip-on-glass assemblies Excessive noise in low-voltage ICs and assemblies Excessive thermal-mechanical stress on large, high-power chips Lack of adequate thermal performance in low-cost packages dissipating over 30 watts Failure to reduce cost of high-density substrates and PWBs for fine pitch/area array ICs and MCMs Lack of robust, cost-effective area array power/ground/clock distribution Regulations restricting the use of lead-free solders. Electronic interconnection substrates technology Radio frequency communications technology Photonics manufacturing Packaging and board assembly Precision electromechanical assembly Cradle-to-grave designs Automated optical inspection and fault recognition.
Long Term 10 to 15 Years
7.4 Enablers Technology Enablers Near Term 0 to 5 Years Product Enablers Leading-edge semiconductor products technology, including use of commercial ICs and related components in some military operations National Information Infrastructure for making commodity consumer products, portable communication systems, PCs, high-performance workstations/servers, automobile engine controllers, and other systems interoperable and affordable Optoelectronics technologies that offer improved cost and performance over many silicon devices and offer opportunities for orders of magnitude performance improvement for new applications Advanced sensors (including integrated devices) have many new product applications, directed at sensing and controlling product performance as well as being a key enabler to achieving closed-loop manufacturing process control By merging the capabilities of sensors and actuators (devices) with information systems (transistors), MEMS is extending and increasing the ability to both perceive and control the physical world
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Power sources are a critical technology many applications, for which it they are the key driver to achieving affordable performance Displays are 20-35% of cost of PCs and over 50% cost of personal digital assistants. As further integration of the display into the product grows, the proprietary technology will reside with the display manufacturers not the product. Process Enablers Achievement of Rapid Product Process Realization based on application of Integrated Product Process Development (IPPD) strategy, use of Integrated Product Teams (IPTs), seamless, open system and integrated computer environment to facilitate incorporating the manufacturability, producibility, reliability, maintainability, supportability and disposal knowledge impacts by domain experts; before the conceptual design is frozen, at which time 70% of the product life cycle cost is committed Modular, flexible, robust, adaptive manufacturing equipment and tools Closed-loop predictive manufactured part process controls, automated testing, including incorporating physics of failures models, where applicable to mathematically predict failure Automated affordable flexible precision model-based assembly system(s) for increasingly smaller, denser, and more precise electronic assemblies Integrated, seamless manufacturing information systems that monitor and control the product being manufactured throughout all process steps Efficient process flow facility layout plans based upon reconfigurable and modular functions incorporating individual product/process models wherever applicable Greater application of product and process standards to reduce number of items to be processed and controlled, as well as greater application of information and measurement standards to ensure better integration of value-added activities. Infrastructure Enablers Variability reduction techniques and tools to better be able to design for manufacturability, producibility and reliability in the early phases of product design More user friendly fault-tolerant engineering/manufacturing/test/inspection software Totally automated paperless factory Significantly more robust, modular, integrated suite of design tools to enable the designer in a cross functional distributed and virtual team to optimize affordability and performance across and between the various engineering domains (systems engineering, electrical, thermal, mechanical, structures, etc.), and functions Integrated business systems with the technical systems through the product life cycle in a distributed and virtual environment to achieve enterprise integration Product, process, equipment, tool and information standards to better enable eliminating reducing redundancies and to facilitate a more robust approach, thus reducing resources needed Rapid physical and virtual prototyping. Mid Term 5 to 10 Years Product Enablers Low-cost intelligent advanced sensors built into a product for altering the control functions/strategy or re-routing electrical signals to by-pass faulty components Low observable and conformal apertures Fused multi-sensor platform for electro-optical, infrared, and radio frequency modes
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Actuator technology development high speed/zero backlash, miniature, high-resolution, high power-toweight ratio, advanced speed reducers with long life and zero backlash, built-in sensing and power control Micro-machining and nano-fabrication techniques-micro-sensors, micro-power systems such as batteries, and micro-controllers Active matrix liquid crystal displays for mobile computers and compact communicators Low-cost, high-capacity storage to handle large image files New papers providing outstanding print quality for all printing technologies. Process Enablers PDES application protocol suites for electronic systems and components to electronically define total product requirements Sensor development various imaging approaches including 2D and 3D machine vision, laser and X-ray imaging, thermal imaging, position and velocity sensors for actuators, high-resolution sensors with absolute position information, nano sensors, and vision-based flexible part feeders Flexible assembly system technology-flexible part feeding technology; assembly system simulation; design rules for assembly; assembly process modeling; assembly systems driven from design data bases; error representation, detection and recovery; design rules for disassembly and recycling; disassembly systems; lowcost assembly systems; and rapid set-up and changeover systems Software to perform automatic color rendering System-level test methodologies, test systems and supporting software tools for chip design and test Methodology for accomplishing process integration Holistic approach to lithography cost needs National high-resolution lithography maskmaking facility New interconnect materials, architectures, and processes for high-density packaging Area array chip interconnection to accommodate many more signal I/Os Low-cost interconnect substrates with line density commensurate with area array chip I/O Improved heat removal methods. Infrastructure Enablers Frequency standards for wavelength division multiplexing (WDM) Zero-defect software development and management guidelines for all equipment and software suppliers Highly clustered integrated factory prototype incorporating modular, fault-tolerant robotics, standardized process modules, and standardized factory modules test bed to test and validate individual sub-systems compatibility Integrated design, analysis, simulation and layout tools that simplify simultaneous optimization of chip, package, and system developments Standards for semiconductor equipment facilities, equipment, components and controls. Long Term 10 to 15 Years Product Enablers 3D holographic displays- precision electronically steerable light sources; solid-state red, green and blue lasers 3D solid image printing High-power, low-cost UV lasers. Process Enablers None identified
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Infrastructure Enablers Detailed product and process technology roadmap for near-, mid- and long-term requirements to focus needed capital and R&D investments Intellectual property rights should be flexible and value-based regardless whether between and among industry, academia, and government Adjust electronics equipment, systems, and software depreciation schedule to 2 years to reflect competitors practices and reality of use Simplify government accounting practices for R&D and production contracts Legislation that limits frivolous class action shareholder suits Generic manufacturing technology development is highly dependent upon performing material characterization analysis, variability reduction analysis, manufacturing producibility capability analysis, and developing an understanding of the key factors influencing manufacturability in the design process Simulate and model the manufacturing process before freezing the design Guidelines for error-detection, correction/recovery and design in testability to achieve failure-free manufacturing Manufacturing needs to be involved sooner in the design process, namely, in conceptual exploration (6.2) and concept definition (6.3a) phases, prior to demonstration validation (6.3b). Business Practice Enablers Near Term 0 to 5 Years Participation in large product market to provide volume demand for components For telecommunications, regulatory policies have a big influence on the desire and ability of carriers to invest in infrastructure. Involvement in standards for telecommunications is critical. Substantially increase the use of best value techniques in government contracts. Use standardized parts to take advantage of increased volume, minimize inventory; use commercial specifications, parts and practices in DoD products Institute contractor certification mechanisms to qualify suppliers, versus in-plant surveillance and audit Transition plan to cost-effectively implement manufacturing R&D. Technology/product suppliers should be part of manufacturing R&D programs to commercialize results for reuse by others. Pass a targeted capital gains differential, permanent R&D tax credit (an investment tax credit to support the retooling and investment necessary to compete internationally) Government cooperation with industry to fully open markets for foreign electronics products Oppose efforts to curtail stock options, needed by small entrepreneurial companies to attract the right people Provide military designer three choices, mil-spec, Qualified Manufacturers List (QML)/Standard Microcircuit Drawing (SMD), commercial parts Variability reduction techniques to identify critical process parameters and implement variability reduction Certified single-source suppliers to provide economic motivation for providing a high-quality product Just-in-time manufacturing to eliminate part or material degradation due to storage Incoming inspection-free part and material receipt Concurrent engineering (IPPD) to develop products/processes as well as technologies Bar code identification of components, products, and intermediates for better inventory management DFM methodologies, including application of test and inspection in assembly and design Standard methodology for describing manufacturing capabilities
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Fail-soft systems designs with on-line backup capabilities System-level cost optimization Rapid implementation of technology solutions to market opportunities Voluntary skills standards for interconnection and assembly design and manufacturing Workforce involvement in teams, total employee involvement Improved customer relationships, improved customer service before and after sale On-time delivery, reliable delivery Develop innovative and higher-value products Alternate performance measures (i.e., activity based costing, non-financial measures) Value knowledge workers and upgrade worker skills.
Mid Term 5 to 10 Years Continuous workforce training and education Second-source global partnership for silicon. Long Term 10 to 15 Years Culture Enablers Near Term 0 to 5 Years Encourage long-term systemic change in K-12 education to raise the basic skills benchmark (especially in math and science) for all U.S. students and to strengthen the school-to-work transition. Educate and train people at all levels (in universities, industry and government) in the understanding analysis of failures, determining root cause, the effect of failure and how to design for elimination of failures. Institute a comprehensive system of industry-established training standards, including an incentive-based system to encourage small and medium-sized company investment in worker training. Reduce oversight, audit, and inspection in government contracting. Sharing of reliability and quality data with partners. Customer/supplier partnerships based upon mutually beneficial values, willingness to work together over long periods, and continually reducing costs for all parties. Increased use of CAD and CAM. DFM tools and standards to reduce manufacturing intervals and errors, coupled with training in CAD, CAM, and DFM for effective product development and manufacture. Understand, use and teach factory integration principles. Industry-wide education in the use of specifications and standards. Expanded corporate familiarity and use of total cost accounting and new technology needs and solutions. Promote trade and engineering specializing in electronic interconnection engineering and electronics manufacturing. Mid Term 5 to 10 Years Environmentally conscious electronics manufacturing techniques. Long Term 10 to 15 Years None identified
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Environment Enablers Near Term 0 to 5 Years Ionic contamination test method is best means to characterize PWB cleanliness Environmental laws and performance goals should address productivity concerns and should consider impact of regulation upon innovation and product life cycle time as well as upon the environment Base regulations on good science and relative risk; focus on performance-based statutes consistent with existing human health standards Encourage public-private cooperative research on key environmental concerns Up-front incorporation of environment, safety and health concerns and impact into materials, products and process design tools Processes with minimal energy and materials consumption, and waste generation Control of toxic off-gassing and emissions Cost-effective cleanliness and environmental controls and standards Enhanced upstream and downstream impact analysis of manufacture design and changes on environment, safety and health Environmental laws and performance goals should address productivity concerns and should consider impact of regulation on innovation and product life cycle time as well as upon the environment Contamination-free manufacturing. Mid Term 5 to 10 Years Industry-accessible information resource of ES&H management and technology best practices. Long Term 10 to 15 Years None identified.
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8.0 GENERAL INDUSTRY Introduction This section summarizes a number of fairly widely differing types of documents and includes all the documents felt to be of interest to the project which are not referenced to a particular industry. In an attempt to faithfully transmit the general sense of the more than 20 documents summarized, the lists of statements at times represent seemingly disconnected views. Since this is the state of references in the literature, it is deemed of more value to retain the original statements than to summarize them at such a high level that the significance of the individual statements is lost. 8.1 Vision A number of the documents strongly and consistently emphasized a general vision for the U.S. We are in a period of rapid economic growth and a period of increasingly significant global trade. Within this setting, the U.S. will have a growing competitive economy with high-skill, high-wage jobs. This will be accomplished while enhancing national security and our quality of life. With less uniformity, the documents indicated additional, more detailed visions. In the future, the economy will be dominated by technology. The health and progress of industrial research will be maintained and will be guided by a national technology strategy. Governments R&D resources will be used more effectively for fostering industrial competitiveness. Current concepts of management will be discarded. The future will be an era of mass creativity. Development speed will increase and programs will enter production with predictable and affordable costs and schedules without sacrificing performance features. Information access will allow easy, reliable, and secure transmission of any medium, anywhere, anytime. Communications will be possible to audiences of one, allowing new forms of personalized marketing. Companies will be responding quickly to queries from around the globe for affordable, high quality products. Information technology will also lead to dramatic changes in social services and education, and will support human resource policies based on skills development. 8.2 Goals, Needs, and Drivers Near Term 0 to 5 Years Goals The following goals were listed consistently in a number of documents: Aggressively expand global markets, promote trade. Improve U.S. competitiveness and promote economic growth. Improve federal government and industry collaboration. Focus federal R&D efforts on programs of mutual interest to industry and government. Coordinate federal and private R&D, identify technologies for R&D with a focus on manufacturing processes. Improve federal government collaboration with industry, states, workers, and universities. Create an environment where innovation can flourish. Innovation will be a key concern in the future. Enable companies to rapidly reconfigure products in response to changing needs. The remaining goals were less consistently mentioned in the documents summarized: Development of highly flexible, decentralized, interactive management structures with self directed work teams Recognition of people as an asset Protection of the environment.
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Needs Points made by a number of documents: Increased flexibility to respond to customer needs Shorter product introduction times (this includes the need to streamline and speed defense procurement) Collaboration of industry, academia and government. These collaborations are needed for technology strategies, science and technology investments, education policy and practices, and trade policy as well as a number of other areas Enhanced sets of standards, nationally and internationally, are required Enterprise-wide integration with the ability to adapt Financial rules that do not reward the short term over the long term Education that enables life-long learning. The remaining needs were less consistently stressed in the documents summarized: Improved strategies for acquiring technologies, given global sources of technology Increased effectiveness of R&D, especially the transfer of results Designing out manufacturing cost, malfunctions, and environmental harm Reducing overhead Researching functional robustness, not just meeting customer requirements Making technical change the basis for competitive advantage Wider use of modeling and simulation to provide greater understanding of the balance between product performance and production Ways to enable companies to share infrastructure costs and core competencies with their competitors and suppliers Value-based, as opposed to cost-based solutions. These solutions include both goods and services. Industry consortia and international research collaborations funded by the federal government. The government should perform international benchmarking. The government should have a strategy for technology deployment. Technology advances in information, communication, flexible manufacturing, and environmental technologies U.S. leadership in basic science and technology. Education is a high priority, and the best minds need to be attracted to manufacturing. Standards for what students should know and the means to meet these standards are needed. Barriers to learning which exist outside the school environment need to be addressed. Company development of robust technologies before products are developed Ability to manage large complex systems More competition between internal and external suppliers Integration of the customer into the manufacturing process, at all levels, to include interfacing with a supplier in the extended enterprise Ability to exploit intangible assets. Improvements in the human technology interface are needed for this. Improved management of technology, integrating it into strategic objective, developing it faster, assessing opportunities, and transferring it. Technology gaps need to be identified. Energy conservation, knowledge-based systems, and waste management are all also necessary Streamlined legal practices and adequate intellectual property protection A national manufacturing technology infrastructure
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Widespread implementation of Integrated Product/Process Development (IPPD) The U.S. needs to find an alternative to industrious productivity of work as the measure of economic health. Specific Technology needs: The National Critical Technologies Report lists specific development areas. Most of these are included with the other industry segment summaries. Those that do not pertain to a specific industry include advanced metals, composites (polymer and metal matrix), structural ceramics, environmental technologies; design and engineering tools such as CAE, human factors engineering, scientific instruments, measurement techniques, systems engineering; production systems including CIM, design for manufacturing, design of manufacturing processes; and future technologies including fuel cells and rapid prototyping. Other listed technology needs, in documents other than the Critical Technologies report include: intelligent controls, intelligent sensors, representation methods, simulation and modeling, software prototyping, intelligent manufacturing cells, integrated tools for product, process, and enterprise design. Computer systems interoperability and a broad global network are needed to support for enterprise integration,. Education Needs: As part of their education, students must have experience in an industrial setting. Learning must be life-long, continuous, with flexible programs matched to students career objectives. Lifelong learning will be enhanced by recognition of academic achievements that occur outside the traditional educational system. The education system must be responsive to changes in industry. Partnerships of labor, business and education are proposed as the solution. Engineering technician education needs to be supported, enhanced and promoted to a greater extent since the contributions of technicians do not always receive adequate recognition. Drivers Six general areas were repeatedly emphasized as having a great impact on manufacturing: 1. Globalization: Global markets are expanding and global competition is increasing. There are an increasing number of global players, and the U.S. has an increasing trade deficit. The U.S. has lost its technological leadership in many areas. (This statement was often repeated.) Developing countries workforce skills are coming close to U.S. skills. Firms are no longer constrained by lack of natural resources, and foreign firms can easily compete in U.S. markets. World economic growth is accelerating, yet productivity growth in the U.S. has been poor and has been decreasing, increasing the potential for competition from abroad. 2. Customer Sophistication: There is increased level of customer sophistication, a higher demand for satisfaction. This expresses itself in demand for decreased time to market, shorter delivery times, lower product cost, and increases in quality, product variety, and availability of customized products. 3. Rate of Change: The impact of technology change is great, and rapid pace of change will continue to increase. Three technologies will have a special impact: communications, new materials, and biotechnology. The increasing interconnectedness of enterprises cause the impact of change to spread more rapidly now than in the past. 4. Human Resources: The notion of having permanent employees is vanishing. The future workforce will be more knowledgeable. U.S. workers and managers had been more skilled than competitors, but are so no longer. Some developing countries have technically educated and underutilized people, and there is a global growing pool of the unemployed. Organizations are flattening and middle managers are being removed. 5. Industrial research: Industrial research growth has slowed. American pre-eminence in R&D is fading and industrial R&D is becoming internationally distributed. The reduction of military R&D is a big contributor to this effect. Strategic technology for the future is increasingly becoming developed commercially rather than militarily.
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6. Supply Chains: There is an increasing dependency on supply chains. Integration of the supply chain will continue, blurring boundaries of customers and suppliers. Value chain relationships must begin to be based on relations other than quality as quality becomes the norm. International production networks make makes management and regulation difficult. Improved communication and efficient transportation have allowed diverse networks to form. The remaining drivers were indicated with less consensus between the documents: The gap in income among people in the world is widening. The American population, and workforce, are aging. The importance of managing innovation is increasing. The pace of innovation in the U.S. is slowing. Product life and lot sizes are decreasing. There is a correlation of business growth to replacement of equipment, making high growth regions better equipped for production. The U.S. has been in a period of low growth, resulting in a vicious circle of decreasing productivity. Market fragmentation is being accelerated by media fragmentation. Manufacturers of any hardware will also be in the software business. Developed countries will move to advanced manufacturing of products with combined hardware and software, expecting to only produce software in the U.S. is unrealistic. U.S. software leadership is declining. America had been the largest market, presenting U.S. companies with local market economies of scale, but America is losing this advantage. America had been richer than other nations, but other nations can now afford all the necessities for advanced production that we can. There is increased automation and more readily available new technology. The defense and communication industries have tight specifications; these technologies are widely used and drive tightening specifications in other sectors. Consumers will become more involved in production. Policies that impact manufacturing include trade policy (such as NAFTA) education policy, macroeconomic policies, anti-trust laws, tax policy, and science and technology policy. Government/Defense Issues: There is shift from military to commercial work. Decreases in military expenditures will harm the U.S. technical base. Current defense procurement is slower than it needs to be to take advantage of commercial developments. Federal labs have a $21 billion budget, and therefore have a significant impact on R&D. We are dependent on foreign resources for critical components of our weapons systems.
Mid Term 5 to 10 Years Goals None identified Needs Improvements to the educational system must be accomplished. These will be fostered by: A presidentially led, bipartisan commitment sustained for the two or more decades it takes for a new generation of better educated Americans to make their way through a greatly improved educational process Changes to the ways schools are organized and run Leveraging state and private on-going initiatives for change Building a well-formed, broadly participatory collaboration in the field of education (especially math and science for K-12) toward shared goals among all concerned parties, in and out of government Engaging the talents and resources of all the federal agencies whose missions depend on technically trained people, and the teachers who educate them Ensuring that schools take advantage of the most successful innovations in the field of education.
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Drivers None identified Long Term 10 to 15 Years Goals Support for virtual enterprises Global support for design and production Information and knowledge based, human-intelligence oriented systems Modular enterprises to support distribution and autonomy, but cooperative practices for achieving enterprise goals Increase environmental awareness Emphasis on product standardization. Needs Make response to change affordable Enable response be completed in time to be effective, to be sustained easily over time, and readily adapted to further change Re-skilling the workforces of the industrialized nations Developing people with the skills to coordinate global companies to meet customer satisfaction Changes to the compensation and reward systems for employees. Drivers Four major areas of concern to manufacturers are: human resources, restructuring the manufacturing architecture, improving processes and products, and a manufacturing focus. Manufacturers are removing redundancies in corporate structures through the removal of middle managers. People released from companies are entering an ever-growing global pool of the unemployed. Companies show tendencies to move toward boundary-less organizations and are entering into alliances with non-competitors to leverage their assets. Lean or agile manufacturing are cited as current best practices that are or will be implemented in many companies. Movement in U.S., Canada, and Europe to focus manufacturing by consolidating assets and resources and then segmenting their use. Trend in Japan to a decentralized focus and to develop portable factories to meet local demand. Continued development of knowledge workers and the demand for employees with superior education, strong aptitude and orientation toward technology, effective communication skills and the ability to cross between management and labor. Progress in linking the supply chain and the creation of virtual organizations Manufacturing is becoming more communication- and information-driven. Competition will be based on the rapid creation and transformation of ideas into products. Public policy does not support leadership in critical technologies. Most of the technologies which will drive economic growth over the next decade already exist. The ability to get them to market is key. A number of issues must be addressed to overcome the barriers to achieve success, including: Competition for manufacturing capital, workforce capability, and effectiveness, availability of proven technology, effective communication in an organization, product/process mix, and installed technology base and its related costs.
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The cost of technology development, validation, training, and adoption will continue to increase as technologies become more and more sophisticated. Lack of National Information Infrastructure Strategy. 8.3 Barriers Near Term 0 to 5 Years Short-Term vs. Long-Term Focus : Traditional management has not linked short-term actions with long-term strategy. Technological investments have not been properly justified financially. Managers are financially sophisticated but are removed from the details of the technology. There is an excess of financial control and focus on short term financial factors. Standard measures of performance are no longer adequate. The high cost of capital, aggravated by a low savings rates, contributes to the short term focus. This prevents investment which, in turn, limits productivity growth. Human Resource & Education: The education and technical skills of workers are inadequate. There is an under-investment in training. A technically changing society makes teaching manufacturing difficult, when curricula are slow to evolve. Education must occur under increasingly less favorable family and social conditions. University curricula and research need to be made more relevant to industry. There is difficulty in hiring local workers with adequate skills. There is a loss of a good work ethic. Employee drug abuse is a real problem. Current reward structures are inadequate. Misalignment of Vision: Extended enterprises do not have a common vision. Stakeholders are not committed to long-term mutual benefits. There is not a common view of how success is measured. Goals are not propagated. A companys mission is not translated into actionable plans shared with employees. Speed of Response: Industry and government have been slow to respond to a changing international environment. Poor Product Development and Production: There has been an inability to translate research results to commercial successes. University focus on basic research and science fundamentals contributes to this. Product realization has been considered to be less important than research. Team approaches to product development have not been used. Failures of Cooperation: Foreign countries have used cooperation within industries to eliminate redundant efforts (e.g., MITI). There is a need for increased cooperation between management and labor. Supply chain management requires intra-firm cooperation. There are also social obstacles to cooperation. There is an unwillingness to empower individuals. There is a lack of trust between individuals and companies. The NIH syndrome is a barrier. Mass vs. Lean Production Mindset : Focus on high volume, undifferentiated products, price competition and simplification of work had put the U.S. in an uncompetitive position. Government Regulations: Anti-trust legislation hinders integration across firms. Regulations create an nonlevel global playing field. The setting of trade policies has a number of shortcomings: passing of information between government agencies is fragmented, trade policy is subordinated to foreign policy, trade policy focuses on process rather than on results such as market share, the long-term impact on technology development of trade policy is not adequately considered, there is no process to build industry-government consensus. Government is poorly organized to deal with commercial technology policy. Technology Development: There has been a lack of government support of technology development. There has been no domestic infrastructure to capture and apply technical information. Government policy does not foster investment by firms. Decline in defense expenditures negatively impact the technology base. Elimination of corporate research programs has led to technical isolation. Production is done for local markets and so technology is drawn only from local markets. Other Points : Management of technology is not well understood. The U.S. is not aware of the importance of product variety nor of the importance of service and repair. High levels of uncertainty exist. There is an aversion to risk. Companies are exposed to increasingly complex interplay of market forces over which they have
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no control. Cross-cultural communication barriers exist. Obsession with productivity may have curbed creativity. Singular technology solutions are sought, rather than integrated solutions. Some feel cost is emphasized over quality, leading to moving work offshore. Traditional bases for corporate decisions about technology are less effective with the rapid pace of change in product/production technology. Standard measures of performance are no longer adequate. Accounting practices are inadequate. Managers have developed complacency from being habitually ahead. Mid Term 5 to 10 Years None identified Long Term 10 to 15 Years Inability to set goals for market and change-responsiveness Inability to identify opportunities Lack of workforce preparation Lack of goal propagation Traditional accounting practices Improper reward structure Lack of cross-cultural communication.
8.4 Enablers Technology Enablers Near Term 0 to 5 Years Critical Technologies: Technology enablers from the national critical technologies list are divided into the following areas: energy, environmental quality, information and communication, materials, transportation, and manufacturing processes and equipment. Energy technology issues include: 1) Energy efficiency which includes building (construction) technologies and non-internal combustion propulsion systems. 2) Energy storage, conditioning, distribution and transmission which includes advanced batteries, power electronics, and capacitors. 3) Improved energy generation, which includes gas turbines, fuel cells, next-generation nuclear reactors, advanced power supplies, and renewable energy. Environmental Quality consists of solvent replacements, monitoring and assessment, pollution control, and remediation and restoration. Information and communication consists of: 1) Components, which includes high-density data storage, high-definition displays, and high resolution scanning technologies 2) Communications, which includes data compression, signal conditioning & validation, and telecommunications & data routing 3) Computer systems, which includes interoperability and parallel processing 4) Information management, which includes data fusion, large-scale information systems, health information systems & services, integrated navigation systems 5) Intelligent complex adaptive systems, which includes autonomous robotic devices and artificial intelligence 6) Sensors, which includes physical devices and integrated signal processing 7) Software and toolkits, which includes education/training software, network & system software, modeling & simulation software, software engineering tools, pattern recognition, and software production.
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Materials, which consists of: 1) Specific materials which includes alloys, ceramics, composites, electronic materials, photonic materials, high-density materials, highway & infrastructure materials, biocompatible materials, stealth materials, and superconductors 2) Structures, which includes aircraft structures. Transportation, which consists of: 1) Aerodynamics, which includes aircraft aerodynamics and surface vehicle aerodynamics 2) Avionics and controls, which includes aircraft and spacecraft avionics and surface transportation controls 3) Propulsion and power, which includes aircraft turbines, spacecraft power systems, and electrically powered vehicles 4) Systems integration, which includes intelligent transportation systems and spacecraft & aircraft integration 5) Human interface, which includes human factors engineering and spacecraft life support. Manufacturing consists of: 1) Discrete product manufacturing, which includes CIM support software, equipment interoperability, intelligent processing equipment, robotics, automated systems for facilities operations, net shape processing, and rapid solidification processing 2) Continuous materials manufacturing, which includes catalysts, surface treatments, ultrapure refining methods, pollution avoidance and predictive process control 3) Micro/nanofabrication and machining, which includes microdevice manufacturing technologies, semiconductor manufacturing, semiconductor integration technologies and artificial structuring methods. Technology enablers that support the manufacturing process can be grouped into: 1) 2) 3) 4) 5) 6) 7) Integrated product and process development New design processes for products and Process Enablers Efficient and accurate modeling methods and tool Planning, scheduling, and production systems to improve productivity and product costs New control methods to improve accuracy, quality, cost Complex systems that respond to change more easily and rapidly New work handling methods to improve efficiency and flexibility of shop floor work flow.
Integrated product and process development including Thomas Register of national industrial manufacturing assets (large, medium, and small), inexpensive CAD/CAM technologies for supply chain , integrated systems (for scheduling, planning, tooling, etc.), capture of nominal and variant product behavior, decomposition of solid shapes for automated stress analysis, design methods, and tools for groups of parts and systems. New design processes for products and processes consists of rapid prototyping for tooling and dies, sheet metal, electronics, high frequency design tools for RF electronics, factory optimization for electronics assembly, advanced computer-based architectures for robust systems architectures for live and virtual simulation distributed virtual systems for performance assessment, interoperable multi-media communications nonlinear emergent behavior and chaos theory, secure, reliable systems special architectures for control and pattern recognition, very-high-bandwidth flexible networks. Efficient and accurate modeling methods and tools for: 3D human model, assembly productivity models, automated trade-offs, autonomous verification of models, communications systems impacts models, methods including common representation of enterprise, methods involving interchange of models with real objects, objective-based CIM model, predictive process control platform and model library, sensor/actuator integration model, world model encompassing design, production, management.
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Planning, scheduling, and production systems to improve productivity and product costs, including autonomous scheduling systems, capture of nominal and variant process behavior, collective process optimization, concurrent process planning and resource allocation, cost estimation in complex systems, interoperable planning tools using speech, video, text, photo, etc., planning for low yield processes, and self-learning in CIM. New control methods to improve accuracy, quality, cost including, adaptive welding, application of nonlinear and adaptive control, artificial-intelligence-based CNC, autonomous next-generation controller, closed-loop control, compensation for thermal/dynamic/mechanical effects, distributed systems with predictable real-time performance, predictive models for heat treatment. Complex systems that respond to change more easily and rapidly, including client/server computing; complex system theory in manufacturing, context-sensitive, agentbased interfaces; customer and supplier interfaces; distributed database management; knowledge technology for integrating planning and operations; manufacturing communications; and object-oriented technology. New work handling methods to improve efficiency and flexibility of shop floor work flow, adaptive work handling, autonomous cooperating robots, autonomous job shop floor systems, improved group technology parts flexibility, means to sense part presence/location/orientation, reduction/elimination of fixture/handler contamination, and robotic handling of parts/tools. Improved use of defense-critical manufacturing and engineering systems including manufacturing involved early in requirements and design, design for six sigma, design for producibility and cost, aging systems (reverse engineering), tools and methods for distributed multi-function teams, rapid prototyping, engineer design/manufacturing tools, manufacturing engineering and tools, enterprise simulation and modeling, preproduction manufacturing validation. Process Enablers Recycling of plastics by depolymerization/repolymerization. Cleaner processes in metal plating and metal finishing; metal coating; and advanced adsorption technologies. Technology departments should train one quality engineering expert for every 20 engineers or technicians, and this expert should have enough knowledge of robustness to help other engineers and technicians solve any problems they encounter in quality engineering. Promotion of manufacturing planning and control, product engineering, and information technology. Development of automated Pull ordering, invoicing, and payment systems, design process integration tools, and production process integration tools. Use small-scale, dispersed factories with equipment that can be operated only when necessary. This provides flexibility. (This is the many-small-units-in-place-of-a-few-large solution. It also requires slack capacity. It does contrast with an equipment use mindset.) Development of methods to reduce non-value-added labor, equipment and software designed for human intervention, and self teaching mechanisms and design. Employment of a total systems approach to identify and develop enterprise software tools, and science-based manufacturing rules to facilitate both designing for manufacturability and producibility as well as facilitating intelligent real time adaptive process control. Manufacturing Cells: A number of enablers related to manufacturing cells were identified. Rapid reconfiguration-open cell architecture. Cell performance simulation-life cycle support tool. Autonomous operation-improved local intelligence. Instant usability of cell generated data-data fusion. Use of simulation, visualization, design of experiments, dynamic control technologies. Provide support for generic technologies in the following areas: electronic technologies, biotechnology, information technologies, manufacturing and process technologies, and advanced materials technologies. Infrastructure Enablers Government assisted investment in specific infrastructure needs will accelerate economic growth: information infrastructure, national user facilities for technology development and use, energy efficient federal buildings, upgrading highways and transit systems, magnetic levitation transportation and high speed rail investment, smart highways research, civil aviation technologies research, new materials research, new assessment tech-
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nologies to assess expected life of existing public infrastructure; benchmarking foreign government activities; assessment of U.S. infrastructure needs; linking public and private efforts; support for education at all levels; establishment of technology networks; identification and dissemination of key technologies; development of technology roadmaps, building supplier networks to set standard and share information on critical technologies; development of leading commercialization practices; use of TQM, process engineering, workforce skills upgrading, and sharing of risks in development The Technology Base system is quite robust. In selected technology areas, the government laboratories are quite capable of rapidly applying expertise to solving technical problems with fielded systems. Mid Term 5 to 10 Years Technology Enablers Intelligent equipment- artificial intelligence and expert systems National Systems Engineering Framework for developing unambiguous digital representation of product and process definition using STEP and current CAE, CAD, CAM, CAT, and CAI tools, integrated in distributed open systems environment for all enterprise users to enable a virtual organization to become agile. Infrastructure Enablers Pursue concurrency within and between enterprises, cooperating with academia on identifying the technological and organizational requirements. Identify the generic infrastructure, technological, and organizational requirements for making the transition from flexible to agile manufacturing. Identify infrastructure requirements that will enhance distributed concurrent product control, development and manufacture. Articulate the requirements for comprehensive manufacturing information exchange standards. Simplify manufacturing-related standards architectures, making them more reliable and extendible. Draw up specifications for these standard standards cooperatively with government and expand representation of the U.S. on international standards bodies. Define the requirements for a global broadband communications network, promoting to government and the public its strategic importance to the nations well being. Create jointly with the government a Factory America Network as a high priority agile manufacturing infrastructure element. Long Term 10 to 15 Years None identified Business Practice Enablers Near Term 0 to 5 Years New enterprise management techniques to improve understanding: comprehensive vision for virtual corporations and agile manufacturing; activity-based case costing; management studies and models; new benchmarks of excellence for cost, quality, and agility; advanced decision aids integrating diverse reasoning with human dialog; concurrent culture in manufacturing;: and order realization processes. Use of JIT to redesign manufacturing enterprise through the promotion of waste elimination, simplification of work, and superior quality; use of information technology to promote concurrent work and work decentralization. Enhancement of the productivity of knowledge workers, capital use and direct labor productivity. Substitution of capital for direct labor. Use of the balanced scorecard (ref. Kaplan) which introduces four new management processes that contribute to linking long-term strategic objectives with short-term actions: a) translating the vision- helps managers build a consensus around the organizations vision and strategy; b) communicating and linking lets managers communicate their strategy up and down the organization and link it to departmental and individual objectives; c) business planning enables companies to integrate their business and financial plans; d) feedback and learning gives companies the capacity for what is called strategic learning, which consists of gathering feedback, testing the hypotheses on which strategy was based, and making the necessary adjustments.
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Enhanced staff capabilities and knowledge ; cross-functional skills; development of core competency skills; empowerment to make rapid and effective decisions that results in profitable customer satisfaction solutions; measures of nontraditional components of job performance; new predictors of job success, organizations for empowerment and teams; performance measures in empowered teams; teamwork in customer opportunity team; unobtrusive real-time measures of human performance; new partnership structures to improve supply chain interaction; global performance benchmarks and metrics; and mechanisms for pre-qualified partnering. Enhancement programs that are seen as valuable to implement are worker safety enhancement, interfunctional communications improvement, and throughput improvement programs. Provide education and training programs to ensure continuous learning opportunities. Use of Humans for primary work while automating secondary work. Primary work is that only doable by humans, like nursing, teaching, tour guiding. Automation should not reduce creative human input to the shop floor. Automation can replace operating, maintaining and inspection tasks. Give incumbent workers access to continual skills development and to jobs that will use their abilities. Workers need to be able to master their own work environment, using technology as appropriate to help. Use technology to allow workers to plan and analyze complex systems. Give workers a larger responsibility for organizing the production process. Treat workers as an asset. Learning will have a new importance. Workers will have to learn more for work and at work. Improve vocational training and learning as part of the job. Workers skills must be broadened to understand a larger part of the production process so they can take advantage of technology which controls more of the process. Employees must feel themselves as full participants in the organization. Reward both cooperation and individualism. Use team projects. Crossfunctional teams. Think of cooperation as a way to overcome market failures. Enhanced financial infrastructure including accounting metrics supportive of agile needs; accounting system reflective true environmental costs; electronics design-for-test business case; enhanced legal subsystems; flexible investment justification; and workforce activity based management. Enhanced legal subsystems including appropriate spectrum allocation for communications; governmental environmental regulations and incentives; improved product liability environment; international regulatory databases; and optimized intellectual rights. Improved business and regulatory issues including accounting system to reflect true costs; demonstration that environmental attributes increase sales and profits; identification of trade barriers, international regulatory database; and regulatory reform for disincentives. Business environment conducive to investment in research and innovation, cost-sharing, evaluation of partnership programs to determine their success and mechanism for ending programs when goals are accomplished. Regulatory and procedural innovation. Improved environmental awareness and infrastructure including; advanced cleaning processes; advisors for green design; design for environment tools benchmarking; dynamic environment models; environmental design advisor; cost modules, materials properties database; environmental excellence programs; government environmental regulations and incentives; international environmental cooperation; noise pollution assessment, mitigation, cancellation; and waste minimization/energy conversion practices. Improved education methods including intelligent instructional development system; environmental education in schools; and secure networked joint service synthetic training. Accelerated use of best practices in defense-critical advanced industrial practices including affordable small-lot development and production, assured deployment of manufacturing research, commercial products for military application, effective business practices, enterprise systems technology, environmentally conscious manufacturing, flexible missile factory initiatives, integrated enterprise systems, integrated product and process development (IPPD), lean manufacturing practices, manufacturing sciences, quality, research on business concepts, robust industrial base, and supplier relationships. Consortia and cooperative mechanisms : Critical technology challenges are increasingly being met by consortia and cooperative mechanisms. Supply chains and consortia of companies must do their future operations planning together. Universities and industry must develop closer ties to focus academia on current industrial needs and to increase technology transfer. Greater flexibility in the availability of external industrial research
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resources (joint ventures, consortia, government programs) must be developed. Development of alliances and joint ventures for specific research programs. Consensus on how to measure (metrics) the effectiveness of industrial research. Strategic Planning: Integration of business strategy and manufacturing strategy. Goals of the manufacturing organization must match those of the business. Continued emphasis on quality, fundamental process development, fast design changes, and a variety of products individualized for each customer. Borderless factories, with communication to facilitate dispersed operations, training and development of employees, and expansion into global markets. Long-range planning and development must receive much more emphasis. Use common measures across functions to promote united, cross-functional effort to integrate planning. Contribute to the domestic environment wherever operations are located. Dont just locate for cost reasons, because a poor relationship with the locality will hurt long-term location in a market. Improved processes for DoD contracting. To reduce overhead, implement Activity Based Costing (ABC), eliminate GTE tracking, reduce technical data requirements, and minimize use of military specifications. To maintain public trust and confidence: privatize defense contract auditing and change acquisition law (to reduce oversight function which is a major factor in overhead costs). Enablers to facilitate collaboration between the public and private sectors: collaborative mechanisms for technology transfer, vehicles to promote the collaboration of government with industry and the universities, and vehicles to promote the multi-company collaboration among U.S. industrial firms. To make collaborative efforts work, U.S. firms must supplement these efforts with in-house activities that are complementary to the external ones. The Capacity Model allows the following: financial and operational integration (operational data is assembled in such a way that the economic impacts of capacity decisions are seen, closed-loop); all the costs of a process are assigned somewhere; if an improvement is seen, the model helps understand where it came from and what type of capacity was impacted; focus on idle capacity; focus on non-productive activities; process/activity based method; effective allocation of responsibility for idle capacity; and cross industry benchmarking. Investment is crucial for productivity and investment in basic scientific and engineering research is essential for long-term economic growth. Apprenticeship programs and continuing education programs in foreign countries are highly successful, especially in Sweden and Germany. Retraining- both on the job and between jobs. Six practices common to the best firms: focus on simultaneous improvements in cost, quality, and delivery; closer links with the customers; closer relationships with suppliers, effective use of technology for strategic advantage; less hierarchical and less compartmentalized organizations for greater flexibility; and human resource policies that promote continuous learning, teamwork, participation, and flexibility. Product Realization: Put products and manufacturing ahead of finance. Establish new measures that take to focus off short term financial performance. Focus on effective use of technology, design for manufacturing. Embrace product customization. Use customer and supplier input in all stages of the product development cycle, and in all parts of the organization. Innovate in production processes, not just in products. Understand foreign languages, cultures and practices. (Competition strengthens the hand of the customer.) Shop internationally. Enhance distribution and service. Invest in basic education and technical literacy. Develop long-term business strategies. Establish policies to stimulate productive investment (including balancing the federal budget). Invest in infrastructure for productive performance. Life-cycle cost reduction, Value Chain Involvement, Comparisons of Target Costing to Cost Plus, Customer inputs guide cost reduction, Suppliers involved early , Involve the value chain in cost planning. Costs should not be passed to suppliers dealers. Bring down costs in the entire value chain. Tax credits, regulatory and procedural innovation, R&D initiatives and education initiatives will provide a basis for increased economic growth and economic competitiveness.
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Mid Term 5 to 10 Years Establish practical near-term implementation criteria for cooperative industrial, government, and academic R&D in agile manufacturing. Adopt methods and procedures to transform the enterprise into an agile manufacturing competitor able to compete in the global marketplace successfully, today and in the future. Continuously improve the quality of the enterprise by constantly advancing the criteria by which quality is measured. Extend and amplify the pull of customer satisfaction throughout the enterprise. Identify cycle time reduction opportunities for all enterprise activities and actively pursue their development. Develop intimate, responsive, supplier-vendor-customer networks, incorporating interactive information exchange systems as appropriate. Assimilate into the managerial decision-making process, as an expansion of corporate responsibility independent of local laws, public concerns about environmental and social impacts of manufacturing, energy usage and of conservation, workplace safety, and workforce constitution. Identify regulatory and legal barriers to the formation cooperative ventures and pursue their removal. Formulate standard models for initiating cooperative ventures. Develop requirements and metrics for cooperation tools, and sharing the cost of developing cooperation tools with government and academia. Establish practical near-term implementation criteria for cooperative industrial, government, and academic R&D in agile manufacturing. Develop jointly with government and academia technology deployment measures. Extend distributed concurrency globally, and extend FAN to the world. Long Term 10 to 15 Years Risk minimization JIT delivery Integrated management Customer-driven, life-cycle planning Dynamic virtual enterprise formation Enterprise modeling and integration Enterprise metrics Workforce preparation Systems integration Intelligent communication Process re-engineering Scheduling and process planning.
Culture Enablers Near Term 0 to 5 Years Education: Develop first class education and training for all. Use extension services, retraining of teachers, and new teaching methods from developments of cognitive science. Develop a coordinated training system to better respond to needs of students, workers, and firms, and which enhances school and work integration. Strengthen technician education and technician career advancement possibilities (multiple detailed recommendations for this are given, including standards for curricula, internships in industry, experiential learning etc.) Encourage knowledge sharing and promote collaboration. Companies need to learn to learn in a way that changes peoples assumptions and assumed cause-and-effect relationships.
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Human Resource Development: Strengthen the human resource base needed for superior technology development. Develop metrics that measure the value of the workforce. Use those metrics to invest in continuous training and education. Pay for breadth of skills, not depth. Involve the workforce in setting company agendas. Reward innovation. Global strategies: Devote resources to understanding global market, industry and technology trends. Insist on access to foreign markets. Coordinate U.S. investment policy with U.S. trade and technology policy. Governmental Technology Policy : Improve technology policy development in the Executive branch. Focus Congress on technology. Have active government leadership in encouraging manufacturing excellence. Emphasize both private and public investments needed for manufacturing development. Government should promote the study, use and dispersion of best manufacturing practices. Other points: Use holonic systems, which creatively respond in a distributed, autonomous way to changes in environment, like living organisms. Develop a more creative workforce, with emphasis on design stage creativity. Manage complex, multi-cultural operations by system, since tacit, culturally accepted rules will not work across cultures. Emphasize deductive approaches to get leap-frog improvement, inductive approaches lead to incremental change. Stimulate private sector R&D. Reduce the cost of financing technology commercialization. Mid Term 5 to 10 Years Remove the organizational obstacles within companies to the formation of cooperative ventures. Empower the workforce at all levels of the enterprise; and involve the workforce in setting company agendas and in exercising initiative. Develop metrics that will measure the value of the workforce as a corporate asset. Use these metrics to define the need for, and invest in, continuous training and education. Identify jointly with academia, the characteristics of a competitive manufacturing workforce and develop educational vehicles for achieving it. Identify, develop and evaluate the effectiveness of metrics appropriate to the management of agile manufacturing enterprise. Long Term 10 to 15 Years Environmental friendliness and energy efficiency replacement materials, chemicals, and Process Enablers. Environment Enablers Near Term 0 to 5 Years Environmental friendliness, energy efficiency, and replacement materials are needed. A number of specific technologies are listed for pollution control, environmental remediation, pollution prevention, and monitoring. Representative examples include solvent replacement, plastics recycling by repolymerization, clean metal plating and finishing, advanced absorption, thermal treatment methods, dry powder coatings, and remediation technologies. Providing assistance to small businesses is recommended. Specific enablers identified include: Solvent Replacement: Pollution prevention-based materials cleaning/decontamination; supercritical CO 2 as a replacement solvent; low-solvent consumer/commercial adhesives Plastics: Recycling by depolymerization/repolymerization Metal Plating: Cleaner processes in plating and metal finishing, metal coating, and advanced adsorption technologies Environmental and restoration technologies will be developed in pollution control, environmental remediation, pollution prevention, and monitoring Partnering to develop clean technologies for pollution prevention for small businesses Common international standards.
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9.0 INFORMATION SYSTEMS 9.1 Vision Advanced information systems will improve the quality of life by revolutionizing the way individuals relate, the way they work together, collaborate, and seamlessly access information without regard to geographic distance or corporate boundaries. Vast amounts of information will be at workers fingertips, allowing them to tap into an extraordinary source of creativity and knowledge. Future global communications networks will facilitate the flow of large amounts of data, video, and audio information while providing the utmost security and privacy. A heterogeneous network of computers and communications systems will provide complete interoperability and reliability for this knowledge. Advanced information systems are one of the primary drivers of economic competitiveness. They are changing the way we work, learn, get health care, shop, communicate, and entertain. There is no more important area for manufacturers to focus on than information systems. Information systems will allow multinational companies to locate their manufacturing facilities anywhere in the world to gain a competitive advantage. The U.S. is in an ideal position to use this technology to be more productive and innovative than our foreign competition. Integrated information systems are transforming century-old industrial organizations, shifting their focus from companies who create solutions to companies who engineer solutions. Representation from all functional elements of the manufacturing enterprise must be coordinated to successfully integrate advanced systems. Standards have both a positive and negative aspect. While international standards are extremely important for interoperability, the U.S. has a poor standard-setting record, and standards often open competition for foreign competitors who are good at engineering. The U.S. Government has a critical role to play with regard to information systems. The quality of the national information infrastructure hinges on its leadership. There are many opportunities to improve access, security, ease of use, and the various regulations that govern its operation. 9.2 Goals, Needs, and Drivers Goals, needs, and drivers identified in the research effort focus on near-term requirements (0 to 5 years) but are generally applicable to longer-term industry needs. Goals Continually improve job skills, create new jobs, and improve U.S. economic strength by providing training in new technologies. Improve manufacturings image, and encourage future generations to select manufacturing as their career. Improve manufacturing processes through advanced modeling and simulation, equipment through the application of process controls, and asset use through schedulers and reconfigurable factories. Increase affordability, ease of use, flexibility, and responsiveness to customer needs, enabling improved capacity and asset use and reduced levels of inventory and capital. Reduce time-to-market by accelerating the transfer of product and process information, enabling greater sophistication in manufacturing operations. Streamline and integrate government regulations to create domestic programs that are sensitive to international considerations. Leverage information systems capabilities to aid efforts to improve the environment.
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Create a seamless web of secure features and services to users with thousands of systems and components interacting in a way that is transparent to users anywhere, anytime. Deploy information systems that can respond effectively to the globalization of manufacturing, enable critical communications services, prevent failures, increase reliability, and transparently adopt the latest technologies as they evolve. Needs Improved software tools to design and the development of more effective systems. Government direction for advanced information infrastructure development, acting as catalyst and coordinator for industry, bringing regulations in line with market demands, and ensuring R&D advances practical applications. Highly efficient manufacturing and design processes that enable faster delivery of products, more rapid implementation of concepts, and improved interaction with customers. Systems must rapidly respond to customer demands and be able to shift easily from one product to another. Operations must be streamlined to balance quality, cost, performance, and time-to-market, eliminating all unnecessary, redundant, or wasteful activities. Industry must address the issues that hinder rapid deployment of products and services. The national information infrastructure must support a full complement of multi-media data types and be accessible to the manufacturing public to satisfy a variety of needs. It must identify and authenticate users and provide a secure and reliable communications medium that guarantees delivery and access to information. Drivers Information systems are being proliferated by a wide variety of resource-intensive applications; digital libraries, information databases, and services. With continuing improvement in price, performance, and capability of microprocessors, information technology is changing more rapidly now than in the Industrial Revolution. Product requirements, however, are rapidly changing due to market demands for greater customization, higher quality and performance, and shorter lead times. Communication and information technologies are breaking down traditional manufacturing strategies and accelerating the globalization of corporate activities, increasing the dispersion of manufacturing operations world-wide. Firms must rely on telecommunications and information technology to manage and coordinate their operations to stay abreast of international competitors. There is a tremendous shortage of skilled labor that can build maintain tomorrows information systems. The reluctance of young people to choose manufacturing as a career makes this shortage even more critical. The development of green products, the use of fewer resources, and increasingly more stringent environmental constraints places a heavier burden on manufacturing information systems. 9.3 Barriers Barriers identified in the research effort focus on near-term requirements (0 to 5 years) but are generally applicable to longer-term industry needs. Information technology often has not lived up to expectations, creating the impression that current information technology is inadequate to support future manufacturing needs. However, it is a facilitator and enabler of major change within the manufacturing industry. Education and training for information technology is grossly inadequate for management, technical staff, and support personnel. Lack of management vision and understanding of the strategic benefits of the application of technology hinder the exploitation of use of advanced information systems. Capital justification for advanced technology investment is very difficult given the short-term profit incentives and market uncertainties inherent to all industry sectors.
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Current information technology is inadequate to support future manufacturing needs and new technologies being deployed based on ill-defined, anticipatory, and competing standards. With the globalization of industry the various human, organizational, and societal factors create significant constraints throughout the supply chain. The cost and effort to define, develop, test, and implement measures to overcome security challenges posed by hackers, intelligence operations, info-terrorists to the global enterprise is overwhelming. Clearly the government must move quickly to protect security and privacy, but its exact role is subject to much debate. 9.4 Enablers Enablers identified in the research effort focus on near-term requirements (0 to 5 years) but are generally applicable to longer-term industry needs. Technology Enablers Product Enablers Improved product/process design technology that help to evaluate trade-offs in cost, performance, quality, and reliability Integrated product and process design tools to decrease design and process development time through concurrent engineering Development of a wide variety of secure communications systems to allow wide-spread access to information via virtually any mechanism; terrestrial, satellite, and wireless Consistent architecture and frameworks for efficient integration and development of distributed systems Development of key applications that enable continued development of critical technologies Process Enablers Factory simulation, modeling, and process descriptions languages to check correctness and completeness of process design Algorithms and tools to solve process problems in real-time, dynamic shop floor scheduling and production systems Dynamic models for describing available resources, integrated with intelligent, real-time sensors and online data collection Advanced materials processing controls for complex processing, machining, and forming Infrastructure Enablers Accelerate evolution of high-speed communications mediums including; broadband, narrowband ISDN, ADSL, and wireless technologies Distributed computer applications accessible over the Internet to support networked factories, microfactories, and real-time communication architectures Creation of computer aided systems engineering (CASE) tools that allow manufacturing personnel to create systems and capitalize on software reuse Development of advanced information storage and transfer mechanisms to effectively communicate product and process data Alternative delivery mechanisms for manufacturing training and education are necessary to address the tremendous workforce re-education needs Mathematically based product, process, and factory models to support multiple perspectives of data and knowledge that can be used to simulate and reprogram factory operations Open-architecture, autonomous agent-based systems to handle complex, dynamic environments and legacy issues
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Improved human/computer interface mechanisms to present a wide variety of factory information to users Development of artificial intelligence system component technologies that fuse information from intelligent sensors across the entire factory Provide on-line access to a wide variety of electronic information services, libraries, electronic commerce and training applications Integration of computers, communications, control systems, hardware, and equipment is one of the most difficult tasks to take advantage of advanced information systems Business Practice Enablers Government must coordinate its efforts to establish a robust, secure information infrastructure not only within national boundaries, but with other nations as well. It must extend the universal service concept to ensure that information resources are available to all citizens and companies at affordable prices. It must proactively promote international standards and fund pilots and demonstrations of new technologies and practices. The role of universities should be enhanced and industry should find ways to work with academia to upgrade university equipment so it more closely aligns with industry requirements. Industry must jointly develop a shared vision of the information age and explore new market opportunities, make systematic investment in technology, and constantly seek to deliver high-quality goods and services. Private sector in the information systems is critical to promote technological innovation and new applications. Both industry and government must continue to promote advanced technology demonstrations and invest R&D toward practical business and consumer needs. Creating an appropriately skilled workforce may be one of the most significant challenges facing manufacturers. Information systems must be applied to provide continual education of the employees and the upgrading of skills tools at all levels of the enterprise. Develop new accounting systems that manage intellectual and information assets based on metrics that determine the impact of information technology on manufacturing. Culture Enablers Industry must remain open to working with government, labor, universities, consortia and users to drive creation of new information technologies and applications. Internal and external work teams within organizations must be provided with advanced groupware tools to support interaction over geographically dispersed locations. Environment Enablers Information reporting systems must be created to provide insight into manufacturing processes so they can be made more environmentally safe and waste free.
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10. MATERIAL PROCESSING 10.1 Vision The challenge for the materials processing industry is to provide better and more affordable materials and processing, by developing the materials and processes to meet the needs for the next century. To maintain economic leadership, the U.S. must remain a world leader in materials processing. 10.2 Goals, Needs, and Drivers Near Term 0 to 5 Years Goals Goals for advances in materials processing include specific targets for weight reduction, corrosion resistance improvement, cost reduction, reduction of waste and pollutants via materials substitution, increase in durability, increase in yields, reduction of flaws, and improved processes for detection of flaws. Others include: Have high-quality research facilities in place, including the government labs, to conduct high-payoff long range R& D. Use government/Industry collaboration to improve R&D. A national approach will enable the U.S. to establish and maintain a leadership position in advanced materials and processing. Be the preferred supplier of globally competitive quality metal components, and to set world standards for technology and innovation. This will result in challenging and well paying jobs, and a strong supplier base. Meet future environmental and health concerns in a cost effective manner. Develop energy efficient methods. Enhance productivity through improved process control and better equipment. Needs The DoD Defense Technology Plan includes environmental issues, and manufacturing technology under the heading of Materials and Processes. These issues are briefly included here to reflect this. Improved environmental technologies are needed to make the processing industry environmentally friendly. Improved manufacturing processes are needed to produce affordable products, with short lead times, Specific technologies listed as critical by the council on competitiveness in the materials processing area: catalyst, chemical synthesis, membrane, net shape forming, precision coating, process control. Some general needs for advanced materials are new lightweight materials, the reduction of the number of parts and joints through the use of castings, welding, diffusion bonding, and superplastic forming, and new modeling techniques to simplify forming operations and assembly techniques. Aluminum industry specific needs include: surface-surface science tribology, high-speed non-contact sensors and control systems for in-line measurement of temperature and performance, maximum application of CAM, laser joining, friction stir welding, enhanced coating technologies, on-line communications, and data resources to seamlessly integrate product and process information An extensive list of specific needs for the casting industry are summarized in detail. Examples of these are: improved lost foam casting technology, define the advantages of semi-solid and squeeze casting technologies, develop new casting alloys, develop cast metal matrix composites, improve control and interaction of process variables, breakthroughs in affordable automated equipment, improved core removal methods, and extended die casting die life. These needs include environmental issue such as recycling and elimination of waste streams. An industry need is to renew emphasis on human resources, education, and training to attract sufficient talent to the industry, and to keep present employees current with latest technologies and techniques. Industry should increase financial resources available to fund research, educational, and marketing programs and en-
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courage partnerships and collaborations to combine the experience, resources and knowledge available in public and private sector organizations. Specific needs listed for the composites industry include a strong, unified response to international competition, a means to certify composite structures, improved process models and controls, better understanding of deformation influences on microstructure, and improved growth in materials R & D for the next 10 years. For the glass industry, specific needs include improved emission controls (combustion optimization and reduced particulates), improved waste management, improved recycling and better consideration for the health and safety of the workers, increased energy efficiency, improved process controls, and improved equipment performance. For the aerospace industry, specific materials needs include: aluminum/silicon carbide or magnesium-graphite airframes, high-strength, heat-resistant ultra-light structures for use in subsonic, supersonic and transatmospheric aircraft such as be metal matrix, ultrafine metal-metal, cermets, ceramic-ceramic thermoplastics, as well as others. Also needed are processing technologies, such as: cost-effective, high-quality processing technology, real-time on-line process control systems, computer modeling, advanced sensors. The steel industry needs to continue to make improvements in energy efficiency, scrap use, near net shape casting, advanced process controls, predictive maintenance, and production rates. Other needs include: radically new products in combination with other materials developed through teaming with customers, use of new processes, computer modeling to improve prediction of performance. In the future, recycling will play an even greater role in the industry than today. The industry will move toward total enclosure and zero emissions and waste. Drivers Specific drivers for the materials for the Aeronautics industry are: weight savings, high-temperature metals, stiffer materials, oxidation resistance for engine components, thermal management (heat dissipation), corrosion resistance, and life cycle cost. Aerospace systems push structural capabilities of materials to their limit. Recycling: Aluminum recycling now contributes 1/3 of the U.S. production. Steel uses 50% recycled material in production. A large percentage of glass products are recycled. Energy Consumption: Energy consumption is a major component of the aluminum industry. Glass is an energy intensive industry. There will be an increased emphasis on recycling as a way to conserve resources and improve energy efficiency. Retrofit technologies that could offer significant increases in energy efficiency could be in place by 2010. Aluminum industry drivers: Aluminum is vulnerable to be replaced by polymer composites if the price of manufacturing composites drops. The amount of aluminum in a car has more than doubled in 10 years and could double again by 2020. Capacity: There is a growing lack of capacity for aerospace materials in the case of a two war scenario. The commercialization process for new advanced materials can be a lengthy (20 years). A number of superalloy companies have been acquired by foreign companies, reducing U.S. capacity. For some fibers used in composites, there are no sources of supply other than Japan. Major restructuring in the glass industry has reduced the number of companies left. Global competition: Global markets and global partnerships provide opportunities for new markets and new competitors. International joint ventures will become commonplace as a cost and risk sharing mechanism. Many foreign countries have government support to develop advanced materials. Facilities will be located with improved proximity to potential customer market bases. Competition for some metals has increased due to capacity in the former Soviet Union. Cast metal industry specific drivers: Casting offers advantages unavailable from other metal forming and fabricating industries. Ferrous metals account for 85% of the product. The industry is tied closely to the automotive, pipe, and industrial machine industries.
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Composites industry specific drivers: Composites unique properties make them enabling materials for major breakthrough technological advances. They have particular leverage in the aerospace industry. The 1990s is expected to be a period of significant growth for hybrid composites. Mid Term 5 to 10 Years Goals Projected goals for defense related materials for the next 5 years include, as a representative sample: 20-30% weight reduction in hardened shelters for personnel, independently controllable emissivity/reflectivity coatings for low observability, affordable processes for growth and polishing of diamond IR domes, improved detection by superconducting electromagnetic sensors, wear-monitoring sensors for life management with 30% reduction in ship maintenance hours, 60% life increase for helicopter replacement parts via increased corrosion and fatigue resistance, nondestructive evaluation detection of hidden corrosion in aircraft, 40% savings via biotech processing industry to provide water-based, low-energy, environmentally compatible manufacturing. Needs Needs for defense materials, for a 5 to 10 year time frame include: implementation of oxy-fuel, electric boost advancements or melting technology to lower air emissions, and energy consumption, new hazard air pollutant and volatile organic component emission standards, and chrome-free replacement refractory to reduce generation of hazardous waste, green products manufactured without ozone depletes or heavy metals and with a high recycled content will find consumer acceptance, stronger, higher temperature-capable fibers are needed for the integrated high-performance turbine technology. Drivers None identified Long Term 10 to 15 Years Goals Long-term goals for defense related materials include: Develop adaptive coatings/systems for low observability that respond automatically to background and threats Provide full active control of ship systems, virtually eliminating acoustic signature Affordable, reproducible SiC for 350 to 500C electronics Provide condition-based maintenance for 80% reduction in mechanical flight mishaps, 40% reduction in rework costs associated with wear via advanced coatings, 50% reduction in the cost of elastomeric components/materials via electroset processing and control of properties, 60% cost reduction in production of welded platforms via computer feedback control with integrated nondestructive inspection acceptance system Complete field repairability of composite structures; reliable joining and inspection of ceramics and metals for hybrid components Advanced composites are projected to constitute 60% of the material used in gas turbine engines by 2020; steel constituted 70% in the 1960s; nickel and titanium constituted 70% in the 1990s Needs A responsive industrial base with advanced manufacturing technologies and processes to reduce costs and lead times at every level Drivers Increasing material content and material quality/performance of advanced products
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10.3 Barriers Near Term 0 to 5 Years Lack of top level recognition for the importance of manufacturing as a creator of wealth, need to better understand the holistic view of manufacturing, etc. Insufficient knowledge, tools and techniques to design for affordability as well as performance, particularly starting early on in the conceptual design phase when 70% of the product life cycle cost is established A number of key materials technologies are current barriers to full use in an industrial environment, because of inadequate performance or affordability results to date Rapidly shrinking supplier base. Drivers Continued demand for shorter lead times and higher quality of smaller production lots International competition Cultural acceptance of new business practices in procurement Existing financial infrastructure government regulations, policies and practices that inhibit knowing the real manufacturing cost Program by program, contract by contract management versus multiple programs, multiple services/agencies and dual-use approach Export controls and anti-trust regulations Inspectability and lack of industry-wide standards for specifications and testing A number of factors contribute to preventing cost effective and timely development of materials, that are unique to the materials processing industry Inadequate joint sponsored funding of specific materials development projects/programs Lengthy, expensive commercialization process Material development transition risk too high High capital costs combined with shrinking profits have limited investment in R&D and equipment Rising energy costs has increased production costs significantly Repairable assets increasingly scarce Stricter standards for emission of NOx, SOx, as well as particular emissions have increased operating costs and reduced availability of capital funds for process improvement Growing use of cross-discipline teams of experts in developing materials and resultant manufacturing processes has created a vacuum of adequately educated and trained people Certain materials have unique barriers to achieving cost effective manufacturing that can limit their broad use.
Mid Term 5 to 10 Years It is difficult to find funding for materials development per se; there needs to be an unambiguous operational need (e.g., crew survivability) and a statement of military performance requirements that drive the materials need and/or an opportunity to reduce DoD costs. Long Term 10 to 15 Years None identified
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10.4 Enablers Technology Enablers Near Term 0 to 5 Years Product Enablers Development of key metallic materials used for airplane and other structures, propulsion, and subsystems applications Development of key electronics, optics and survivability materials applications Composite materials applications Other materials applications. Process Enablers Characterize the material and process parameters for key products and processes Develop closed-loop predictive processing of materials and automated non-destructive methods of inspection and testing Develop more flexible, modular, plug compatible, and robust automated manufacturing equipment and tooling to more cost effectively manufacture small lots of a broad range of materials Develop computer simulation tools to capture materials and process characteristics as well as CAD data to enable improved simulation and modeling of the materials processes. Infrastructure Enablers Provide continued 72-hour quick-action response to field/depot material related problems Interoperable seamless computer software tools-product process depiction, visualization, analysis and animation. Mid Term 5 to 10 Years Product Enablers Development of key metallic materials used for airplane and other structures, propulsion, and subsystems applications Development of key electronics, optics, and survivability materials applications. Process Enablers Characterize the material and process parameters for key products and processes. Infrastructure Enablers None identified. Long Term 10 to 15 Years Product Enablers None identified Process Enablers More flexible, modular, plug compatible, and robust automated manufacturing equipment and tooling to more cost effectively manufacture small lots of a broad range of materials. Infrastructure Enablers None identified. Business Practice Enablers Near Term 0 to 5 Years Defense industry practices: use 6-sigma approach in design development; incorporate integrated product/process development into the supplier network; develop demonstrations to prove effectiveness of new/improved repair processes in realistic production conditions; rapidly develop, validate, & deploy factory
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and business processes and practices that can reduce repair and production costs and cycle times; and leverage funding and related efforts from other federal and private sector sources. Federated Lab Concept: Establish federated lab concept to partner with industry and academia to conduct collaborative research. Scientists and engineers will work in each others facilities(private industry, universities, other government) as needed. Establish independent peer review board to oversee research. Conduct customer survey of the quality and effectiveness of the research. Build on own core competencies and partner with those who have the expertise for the rest of ones needs. Establishment of a long-term joint industry, government, and academia investment policy in advanced composites. Integration of design and manufacturing to reduce development cycle. Establish international standards material specifications and testing methods. Revise export control restrictions. Provide R&D investment incentives. Reformulate anti-trust regulations, adopting a viable framework for R&D consortia and joint-venturing. Mid Term 5 to 10 Years Use 6-sigma approach in design development. Incorporate integrated product/process development into the supplier network. Develop demos to prove effectiveness of new/improved repair processes in realistic production conditions. Rapidly develop, validate, & deploy factory and business processes and practices that can reduce repair and production costs and cycle times. Leverage funding and related efforts from other federal and private sector sources. Long Term 10 to 15 Years None identified. Culture Enablers Near Term 0 to 5 Years Establish composites materials engineering curriculum, particularly in ceramics matrix. and an interdisciplinary approach to problem solving characterized by teamwork and cooperation between scientists and engineers in industry, academia and the national laboratories. Mid Term 5 to 10 Years None identified. Long Term 10 to 15 Years None identified. Environment Enablers Near Term 0 to 5 Years Provide environmentally compliant high-performance powder based paints. Scale-up and transition environmentally compliant LO aircraft paint. Establish environmentally compliant coating. Development of new, environmentally benign refrigerant chemicals. Advocate process of generating calcium silicate from industrial waste, developed by EPA, used in coal-fired boilers and utility grids. Mid Term 5 to 10 Years Waste minimization to reduce land filling and disposal costs. Salt cake treatment and recovery to minimize landfill. Cost-effective retrofit of Solderberg reduction cell technology to minimize emissions. Aluminum skim and dross processing. Optimized coating technology to eliminate chrome. Long Term 10 to 15 Years None identified.
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11.0 MACHINE TOOLS Introduction The Association for Manufacturing Technology (AMT) has developed a roadmap for the Machine Tool industry. This document is proprietary and cannot be released. AMT is preparing a public document that should be available by September 1996. The following summary was developed from the National Center for Manufacturing Sciences (NCMS) Collaborative Manufacturing Agenda . NCMS chose to focus its agenda on three categories of a manufacturing enterprises functional areas. The Manufacturing Equipment, Processing, and Fabrication (Factory Floor) area addressed the Machine Tool industry. 11.1 Vision Driven by the need to compete in a global economy, manufacturing organizations are being forced to become leaner and more productive. 11.2 Goals, Needs, and Drivers Goals, needs, and drivers identified in the research effort focus on near-term requirements (0 to 5 years), but are generally applicable to longer-term industry needs. Goals To be competitive, manufacturing organizations must continue to produce high-quality products, increase new product introduction rates, increase affordability, and respond quickly to change. Needs To achieve desired cost, quality, and cycle time enhancements, every stage of product development and manufacture must be analyzed and improved. The process capability metrics now employed in some successful manufacturing enterprises should be adopted as a universal measure of process maturity to support low-risk transition to production. Experimental initial process capabilities must be developed and evaluated sufficiently to provide confidence in system design or in improvements to existing systems when productiontested processes are not immediately available. Besides risk reduction, methods must be found or developed to reduce the per-piece cost of small lot production orders to that of higher-volume orders. Accomplishing this goal will require quick setup and changeover fixturing. It will also require first-pass accuracy and repeatability resulting from extraordinarily close monitoring and sensing of acquisition, analysis, and process correction techniques. Present closed-loop control algorithms, based on these additional capabilities data, must be extended and refined. Another important issue is material life cycle cost and its effect on the entire production system. Less important is the initial or entry cost of materials into the process, which represents traditional thinking about material costs. For example, more expensive materials may pay off in terms of reduced tooling costs and product weight. Overall system evaluation, the key to materials affordability, deserves system analysis because of its complexity and impact on overall cost considerations. Materials considerations for other than the end product deal with cutting edges, composite structures, surfaces, lubricants, and coolants. All areas have room for technical and cost improvement. Improved sensors is another key issue. Their placement into the actual process location to extract dimensional and process variable data and feed it back improves the process. The integration of improved sensors is aided by the availability of low-cost computing power that can be located at each tool. Correlation of in-process dimensional and physical variable data can provide the basis for virtual sensing, where certain data are hypothesized or fused from a compilation of other data. Specific key manufacturing needs and program areas for this category are identified in the Enablers section below. Although many of these needs are not new, the absence of solutions remains a challenge for all manufacturers.
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Drivers Manufacturing organizations must compete in a global economy characterized by continued rapid, unpredictable change. Nations will lose control to global business. Shrinkage of the defense industrial base. New technology will be more readily available. There will be increased automation and integration. Continued focus on environment issues. There will be a widening variance in literacy and education, rising levels of specialized skills required, a vanishing notion of permanent employees, and a higher average age in the workforce. 11.3 Barriers Barriers identified in the research effort focus on near-term requirements (0 to 5 years) but are generally applicable to longer-term industry needs. A number of issues must be addressed to overcome the barriers to success, including: competition for manufacturing capital, workforce capability and effectiveness, availability of proven technology, effective communication in an organization, product/process mix, and installed technology base and related costs. Key barriers that must be attacked are: The cost of technology development, validation, training, and adoption will continue to increase as technologies become more and more sophisticated. Lack of a national information infrastructure strategy. 11.4 Enablers Enablers identified in the research effort focus on near-term requirements (0 to 5 years), but are generally applicable to longer-term industry needs. Technology Enablers Product Enablers Advanced materials with improved performance and acceptability New concept machine designs to improve quality and products in shorter cycle times New concept machines that provide rapid-response, high-quality products. Advanced spindle technology to reduce machine downtime and improve quality New machine tool drives to produce quality parts faster and cheaper Improved tooling for better quality and lower costs Intelligent process sensors to enhance process/product knowledge Process modeling to improve process understanding, design, control, and productivity Process control to increase quality, cost-effectiveness, and production New electronics packaging technology Electronic component, packaging, displays, and disposition. Advanced techniques to improve machine structures and materials Improved processes to extend service life and increase capabilities of current processing equipment New manufacturing processes with improved cost, response, performance New board assembly technology Accelerated use of best practices in defense-critical processing and fabrication.
Process Enablers
Infrastructure Enablers None identified. Business Practice Enablers Encourage knowledge sharing Promote additional collaboration. Culture Enablers None identified. Environment Enablers None identified.
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12.0 TEXTILES/APPAREL 12.1 Vision The integrated textile complex (ITC) fiber, textile, apparel, retail sectors will have broad cooperation, partnering, and sharing of information, talents, and resources throughout the supply chain. Increased automation and agile operations, including mass customization, quick-response and demand-activated manufacturing, will reduce inventories and increase profit margin. ITC companies will have flexible organizational structures, treat workers as the most valuable company resource, and provide investment and profit-sharing opportunities for all employees. Global customers will be delighted by the quality, price, and environmental friendliness of U.S. manufactured ITC products. 12.2 Goals, Needs, and Drivers Near Term 0 to 5 Years Goals The ITC will provide faster response to consumer demand, maintain smaller inventories, eliminate off-line testing, use increased automation and improved process accuracy, and mass customize fabricated product leading to increased sales and profits and increased U.S. market share. Inventory turnovers will average 8.5 for textiles, 7.1 for apparel, and 6.1 for retail sectors. First-price sales of apparel will increase to 57%. U.S. manufactured products sold in the U.S. will increase to 48%, and 36% will be entirely manufactured in the U.S. Greater than 30% of the ITC will be interconnected and fully use the electronic marketplace, leading to greater responsiveness to consumer demand and reducing the time from design concept to market. The fiber manufacturing process will maintain a raw materials conversion factor of 97%, first-quality yield of 94%, productivity factor of 1.1 kg/m-h, energy usage of 15.5 kWh/kg, product waste of 2.6%, minimum product lot size of 27 kg, an average product order response time of 20 days, product changeover time of 40 minutes, and an off-line testing cost of $2.7/kg. New cotton varieties will be genetically engineered for drought resistance (5%), cold tolerance (5%), deciduous (5%), increased fiber yield (80%), enhanced fiber length (20%), improved fiber uniformity (10%), enhanced fiber length (10%), and improved fiber uniformity (10%). Raw materials conversion rates will increase in the textile industry for the following processes: fiber-to-yarn 95%, yarn-to-fabric waterless processes 98%, yarn-to-fabric water processes 55%, fabric-to-colored/finished fabric waterless processes 72%, and fabric-to-colored/finished fabric water processes 15%. Average textile manufacturing productivity will increase to 23 kg/m-h for fiber-to-yarn production, 30 kg/m-h for yarn-tofabric production, and 90 kg/m-h for fabric-to colored/finished fabric production. Average energy usage will decrease to 2.8 kWh/kg for fiber-to-yarn manufacturing, 3.5 kWh/kg for yarn-to-fabric manufacturing, and 7.6 kWh/kg for fabric to colored/finished fabric manufacturing. First-quality yields will increase to 99.7% for fiber-to-yarn production, 99% for yarn-to-fabric production, and 90% for fabric-to-colored/finished fabric production. The minimum production lot size for colored/finished fabric will decrease to 2.5 m2. Product changeover times will decrease to 170 minutes for fiber-to-yarn production, 200 minutes for yarn-tofabric production, and 70 minutes for fabric-to-colored/finished fabric production. Apparel manufacturing will become more automated using single-ply cutting, advanced multistitch sewing, and digital printing. The average speed of single-ply cutting machines will increase to 500 cm/sec with an accuracy of 0.2 cm, and a cost per machine of $300K. Advanced multistitch sewing machines will average 3 stitch types, have a reconfiguration time of 20 minutes and have an average cost per machine of $4.5K. Two percent of the industry will use screen/roller fabric color application, 4% will use digital printing for fabrics and 6% will use digital printing for garments.
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New fabrics will be developed that can be chemically or electrically laundered to eliminate drycleaning; have thermal memory, active or adaptive cooling and warming; consist of manmade fibers with the feel of natural fibers containing no defects, wrinkles or shrinkage; and that dry rapidly. Capability for cost-effective limited lot size production of specialty fabrics will be developed. Business systems will be developed that are paperless, wireless, and that enable leveling of capacity and demand across the industry. Uniform trade regulations will be developed for business relationships worldwide. High-speed, automated garment production systems will be developed which operate in a 3D environment. Systems will be established to provide a literate workforce, and better ways to compensate and motivate associates will be developed. Processes will be developed to enhance environmental stewardship including elimination of wet processes, and zero discharge manufacturing. Integrated anti-shoplifting systems will be developed. Needs The ITC needs generic technologies for improved flexibility, speed, and product quality; sensors that aid in process control; natural fibers with improved agronomic properties, cycle time, and seed development; alternative processes for dying and finishing operations; improvements in machine speed and reliability for the manufacture of yarn and formation of fabric; and waste-free, environmentally friendly, recyclable, flexible, energy efficient processes and systems. Development is needed for environmentally safe and cost-effective wet processes, recycling of waste products, and recovery and reuse of chemicals and solvents. Universal information interfaces, accurate forecast modeling, methods for predicting comfort and wearability, and better accounting systems are needed for the soft goods industry. Better methods are needed for applying color, producing static free and stain resistant materials, and transporting product. Integration of dynamic simulation with flexible, automated, intelligent manufacturing is needed for both advanced manufacturing processes and manufacturing systems management. Drivers The ITC must respond to increasing expectations of global customers who demand faster response times, lower cost and higher response times, and to increasing erosion of U.S. global and domestic market share. Mid Term 5 to 10 Years Goals Greater than 60% of the ITC will be interconnected and fully leverage the electronic marketplace, leading to greater responsiveness to consumer demand and reducing the time from design concept to market. Inventory turnovers will average 9.3 for textiles, 8.0 for apparel, and 7.0 for retail market sectors. First-price sales of apparel will increase to 62%. U.S. manufactured products sold in the U.S. will increase to 56%, and 41% will be entirely manufactured in the U.S. The fiber manufacturing process will maintain a raw materials conversion factor of 99%, first-quality yield of 98%, productivity factor of 1.3 kg/m-h, energy usage of 12.9 kWh/kg, product waste of 2.2%, minimum product lot size of 9 kg, average product order response time of 10 days, product changeover time of 20 minutes, and an off-line testing cost of $0.9/kg. New cotton varieties will be genetically engineered for drought resistance (30%), cold tolerance (20%), insect resistance (5%), deciduous (20%), increased fiber yield (85%), enhanced fiber length (75%), improved fiber uniformity (60%), enhanced fiber fineness (20%), increased fiber strength (60%), and improved fiber maturity (50%).
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Raw materials conversion rates will increase in the textile industry for the following processes fiber-to-yarn (97%), yarn-to-fabric waterless processes (99%), yarn-to-fabric water processes (80%), fabric-tocolored/finished fabric waterless processes (90%), and fabric-to-colored/finished fabric water processes (50%). Average textile manufacturing productivity will increase to 27 kg/m-h for fiber-to-yarn production, 33 kg/mh for yarn-to-fabric production, and 400 kg/m-h for fabric-to colored/finished fabric production. Average energy usage will decrease to 2.4 kWh/kg for fiber-to-yarn manufacturing, 2.8 kWh/kg for yarn-to-fabric manufacturing, and 5.4 kWh/kg for fabric to colored/finished fabric manufacturing. First-quality yields will increase to 99.9% for fiber-to-yarn production, 99.9% for yarn-to-fabric production, and 95% for fabric-tocolored/finished fabric production. The minimum production lot size for colored/finished fabric will decrease to 0.3 m2. Product changeover times will decrease to 50 minutes for fiber-to-yarn production, 75 minutes for yarn-to-fabric production, and 10 minutes for fabric-to-colored/finished fabric production. Apparel manufacturing will become more automated using single-ply cutting, advanced multistitch sewing and digital printing. The average speed of single-ply cutting machines will increase to 700 cm/sec with an accuracy of 0.1 cm, and a cost per machine of $150K. Advanced multistitch sewing machines will average 4 stitch types, have a reconfiguration time of 10 minutes and an average cost per machine of $3.5K. None of the industry will use screen/roller fabric color application techniques, 12% will use digital printing for fabrics and 12% will use digital printing for garments. Needs None identified for the 5- to 10-year timeframe. Drivers None identified for the 5- to 10-year timeframe. Long Term 10 to 15 Years Goals Greater than 80% of the ITC will be interconnected and fully leverage the electronic marketplace, leading to greater responsiveness to consumer demand and reducing the time from design concept to market. Inventory turnovers will average 9.7 for textiles, 8.5 for apparel, and 7.5 for retail market sectors. First-price sales of apparel will increase to 65%. U.S. manufactured products sold in the U.S. will increase to 60%, and 44% will be entirely manufactured in the U.S. The fiber manufacturing process will maintain a raw materials conversion factor of over 99%, first-quality yield of over 99%, productivity factor of 1.4 kg/m-h, energy usage of 11.6 kWh/kg, product waste of 2%, minimum product lot size of 4.5 kg, an average product order response time of 5 days, product changeover time of 10 minutes, and no off-line testing costs. New cotton varieties will be genetically engineered for drought resistance (60%), cold tolerance (40%), insect resistance (20%), deciduous (80%), increased fiber yield (85%), enhanced fiber length (80%), improved fiber uniformity (90%), enhanced fiber fineness (40%), increased fiber strength (90%), and improved fiber maturity (55%). Raw materials conversion rates will increase in the textile industry for the following processes fiber-to-yarn (98%), yarn-to-fabric waterless processes (99%), yarn-to-fabric water processes (95%), fabric-tocolored/finished fabric waterless processes (95%), and fabric-to-colored/finished fabric water processes (90%). Average textile manufacturing productivity will increase to 30 kg/m-h for fiber-to-yarn production, 35 kg/mh for yarn-to-fabric production, and 600 kg/m-h for fabric-to colored/finished fabric production. Average energy usage will decrease to 2.2 kWh/kg for fiber-to-yarn manufacturing, 2.6 kWh/kg for yarn-to-fabric manufacturing, and 1.3 kWh/kg for fabric to colored/finished fabric manufacturing. First-quality yields will increase to over 99.9% for fiber-to-yarn production, over 99.9% for yarn-to-fabric production, and 99% for fabric-to-colored/finished fabric production. The minimum production lot size for colored/finished fabric will decrease to 0.04 m2. Product changeover times will decrease to 30 minutes for fiber-to-yarn production, 30 minutes for yarn-to-fabric production, and 1 minute for fabric-to-colored/finished fabric production.
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Apparel manufacturing will become more automated using single-ply cutting, advanced multistitch sewing and digital printing. The average speed of single-ply cutting machines will increase to 800 cm/sec with an accuracy of less than 0.1 cm, and a cost per machine of $75K. Advanced multistitch sewing machines will average 4 stitch types, have a reconfiguration time of 10 minutes and have an average cost per machine of $3K. None of the industry will use screen/roller fabric color application techniques, 15% will use digital printing for fabrics and 15% will use digital printing for garments. Needs None identified for the 5- to 10-year timeframe. Drivers None identified for the 5- to 10-year timeframe. 12.3 Barriers The supply pipeline for the ITC is over a year long for many products. Less than 20% of that time is involved in actual production. Large inventories of up to 180 days of finished goods are required to meet retail sector needs because of the unresponsiveness of the product pipeline. High-output, large-scale processes in the fiber production sector are relatively inflexible and inefficient for changing from one product to another. Energy, labor, materials and first-quality capacity are wasted during fiber product transition. Dying and finishing processes are not flexible, rapid, or efficient. 12.4 Enablers Technology Enablers Near Term 0 to 5 Years Product Enablers Technology products needed by the ITC to reach the goals defined by the vision include body measurement systems; high-speed single-ply cutting technologies; CIM cutting systems for linking pre-production to manufacturing; technologies for single garment printing, dying, and finishing; dynamic, advanced, flexible sewing technology; gene transplant technologies; and on-line process control and quality monitoring systems. Advanced sewing systems using ultra high-strength chameleon thread, ultrafine needles and knives which dont need sharpening, built in feedback sensors and self diagnostics, intelligent control of the sewing process, and linkages with integrated CIM systems. A personal measurement card will help enable rapid customization of soft good Product Enablers Moldable fabric with shape memory will help enable 3D garment manufacturing processes. Process Enablers Technology processes which will help achieve ITC goals include process control systems, in-line and embedded sensors, genetic engineering, rapid and continuous flow manufacturing, supercritical fluid cleaning, advanced printing technologies, material handling, single-ply cutting, and tagging technologies. Automated, integrated and modular cutting and sewing processes with on-line real-time inspection and diagnostics capabilities for both equipment performance and fabric quality. Personal measurement systems to provide customized garment specifications. User friendly distributed, sensor based information systems for real time planning and tracking of individual garments, for remote diagnostics and control of manufacturing equipment, and for life cycle cost analysis of garments. Digital printing on 3D finished garments.
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Special process needs include a bobbinless lock stitch and low-cost automated packaging of soft good Product Enablers Advanced simulation, information management, process and product development, sensors, controls, and metrology will be performed in an agile, intelligent and environmentally conscious fashion. Infrastructure Enablers Technology infrastructure which will help achieve ITC goals include communications technology for seamless linkage between ITC companies, communication tools for the electronic marketplace, simulation models of the manufacturing processes and business practices of the ITC, and a DNA library of cotton genetic traits for tissue-specific portions of the genome. Standards, integrated databases, and machinery pools provide a basis for improving the competitiveness of the industry. Long Term 10 to 15 Years Gene transplant technologies are needed to create a deciduous cotton with no degradation of performance attributes. Business Practice Enablers The ITC companies will increase the information transfer between companies for more effective planning and decision making, create flexible organization structures for agile operations and rapid use of new technologies, form alliances that link independent companies in customer-supplier support system relationships, and create investment and profit sharing programs to maximize retention of valued people resources. Improved business practices will include better information transfer between users and suppliers, improved customer feedback, user friendly management systems, and the selling of manufacturing capacity. Culture Enablers Advanced employee training will enhance worker productivity and innovation. Partnering with local communities on training and infrastructure needs will create a cost-effective environment for business and foster long-term stability in the quality and morale of the workforce. Better educated and certified operators and technicians will become cross trained as multi-machine tenders instead of single machine operators. Environment Enablers A mindset of environmental stewardship must be fostered throughout the ITC. Specific issues to be addressed are: fibrous solid waste reuse, colorant and auxiliary recovery, metals speciation, air emissions reduction, improved chemical application, alternative cleaning technologies, creation of environmental decision tools, re-engineering of the slashing process, development of process control systems for the elimination of process waste, reduction of nonrecyclable waste through better fabric use, and tagging technologies that will promote recycle upon product retirement. Biodegradable sizing will also improve fabric handling capabilities.
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13.0 TRANSPORTATION 13.1 Vision Transportation, representing 12% of the GNP, is critical to U.S. economic growth and job creation. Americans spend over $1 trillion on transportation each year; the value of all motor vehicles on U.S. roads (valued at $700 billion) is approximately $900 billion. 13.2 Goals, Needs, Drivers Goals, needs, and drivers identified in the research effort focus on near-term requirements (0 to 5 years), but are generally applicable to longer-term industry needs. Goals Maintain U.S. world leadership in aircraft, engines, avionics, air transportation, space, automobile, truck/bus, rail, and shipbuilding sectors to remain globally competitive. Needs The nations transportation infrastructure needs to be upgraded. Automobiles and aircraft must be more fuelefficient, affordable, and environmentally compatible. Highways, bridges, and railroads must be made to last longer and minimize use of non-renewable resources. The U.S. government must reorganize to support wise and effective decisions, policies, and legislation. Drivers None identified 13.3 Barriers None identified 13.4 Enablers Technology, Business Practice, Culture, and Environment Enablers identified in the research effort focus on near-term requirements (0 to 5 years) but are generally applicable to longer-term industry needs. Technology Enablers Product Enablers Develop new, high-performance materials to construct new tools and lightweight vehicles Implement advanced control systems in rail and smart transportation systems Investigate alternative fuels and power systems for electric and diesel engine technology. Process Enablers Develop new manufacturing process technologies for engines that reduce costs, improve performance, and enhance safety. Improve inspection, maintenance, repair, disposal, and recycling. Infrastructure Enablers Integrate information systems and intelligent sensors throughout the industry to take maximum advantage of existing technology and knowledge. Business Practice Enablers Develop a detailed analysis of operational characteristics, performance, condition, environmental, and social impacts of new technology and practices, and benchmark existing practices to identify areas for potential improvement Improve interaction between institutional, regulatory, and other industry stakeholders
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Develop human performance assessment methodologies and tools. Develop databases that characterize differences in performance capabilities, limitations, and behavior patterns of people. Culture Enablers None identified. Environment Enablers Improve the fuel efficiency and emissions of all vehicles, aircraft, and ships and reduce the demand for energy from engine and drive trains.
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January 1997
Prepared by: James J. Hughes edited by Regina L. Wolkoff
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PREFACE There are individuals whose ability to identify and extrapolate socioeconomic and technical trends is widely recognized. This report presents a sampling of that work relative to the evolution of manufacturing and the global competitive environment. This material was used to help develop the Global Drivers section of the NGM framework discussed in Volume I, and to help create an overall context for definition of the NGM Company and the NGM Extended Enterprise. As such, it is part of the background material used in the NGM project, but there is no intent to provide any one-to-one correspondence between the comments excerpted here and the statements in the NGM project summary. While this material reflects many perspectives, it is not an exhaustive summary of futures thinking. Futurists often differ and frequently present opposing views. This emphasizes the need for the NGM Company to establish an affordable process to obtain and evaluate balanced perspectives. The World Futures Society (WFS) is a reasonable starting point for available and generally objective abstracts, but in the long term there is a role for collaborative futures assessment through industry associations, government/industry/academic partnerships, and similar collaborations. The future is not predictable and the study of the future is, by definition, imprecise. Futurists are cautious about merely projecting todays trends forward because doing so misses major turning points. The value of futurists observations lies in what they suggest might happen, thereby enabling people to choose what to plan for or to attempt to influence.
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CONTENTS 1.0 Global Drivers ..................................................................................................................................... 1 1.1 Technology Drivers ......................................................................................................................... 1 1.2 Information Drivers ........................................................................................................................ 3 1.3 Economic Drivers ........................................................................................................................... 5 1.4 Societal Drivers ............................................................................................................................... 6 1.5 Geopolitical Drivers ........................................................................................................................ 7 1.6 Environmental Drivers ................................................................................................................... 8 1.7 Driver Interactions ........................................................................................................................ 10 2.0 Global Competitiveness ..................................................................................................................... 12 2.1 The United States ......................................................................................................................... 13 2.2 Asia In General ............................................................................................................................. 15 2.3 Japan ............................................................................................................................................ 15 2.4 China ........................................................................................................................................... 16 2.5 European Community .................................................................................................................. 16 2.6 Former Soviet Union .................................................................................................................... 17 2.7 Developing Nations/Regions ........................................................................................................ 17 3.0 Actions to Identify & Evaluate Continuing Change ........................................................................... 18 4.0 Conclusions and Recommendations .................................................................................................. 19 Appendix 1 Sources ................................................................................................................................. A-1 Appendix 2 Footnotes .............................................................................................................................. A-5
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1.0
Global Drivers
How and from where we look determines what we see.
usiness leaders are well aware that changes in global conditions have tremendous impact on business and industry, and even on entire nations.1 Many have experienced the futility of addressing a single change in isolation and recognize the need to consider the simultaneous interaction of many changes. They also know that this is not a simple task and that it requires new approaches. Quantum physics, chaos theory, and biology provide useful insights. It has been called the most powerful concept of recent times and challenges our very understanding of what constitutes reality. It makes the point that how and from where we look (our perspective) determines what we see (our perception of reality).2
Chaos theory postulates that all whole systems behave in similar ways.3 This lets us use what we know about a system with which we have experience to learn about systems with which we are less familiar. Biological models explain dynamic change better than models based on mechanics. In biology, a long period of progressive evolution is sometimes interrupted by revolutionary change that results in something totally different, e.g., a new species. This is called punctuated equilibrium. This concept is applicable to changes in the global drivers discussed here. The last time such a fundamental change occurred was when social and economic systems shifted from agriculture and feudalism to the industrial age and capitalism.4 It appears that we have entered a new period of punctuated equilibrium, driven by changes generally grouped into the following interactive categories: Technology/science Information/knowledge Global economy Society/culture Geopolitics Environment. Since something totally different will emerge, assumptions and behaviors that previously determined success will no longer work. Those who win tomorrows global competition will have significantly different characteristics from those who win today.5 1.1 Technology Drivers
Those who win tomorrows global competition will have significantly different characteristics from those who win today.
The last time a change this fundamental occurred, social and economic systems shifted from agriculture and feudalism to the industrial age and capitalism.
Today, science is based on unpredictability, incomplete control, and a plurality of legitimate perspectives and thus reflects the loss of hegemony of a single world view.6 It is anticipated that revolutionary new science will have significant impact in the next few decades. This will likely accelerate the already exponential rate of change in technology. How does a manufacturing enterprise thrive or even survive in such an environment? Peter Drucker provides some good starting points in Managing in a Time of Great Change.7
Successful innovations exploit changes that have already happened. They exploit the time lag between the change itself and its perception and acceptance. At least half the important new technologies that transformed an industry came from outside that industry.
Successful innovations exploit changes that have already happened. They exploit the time lag in science, often twenty-five or thirty years between the change itself and its perception and acceptance. At least half the important new technologies that have transformed an industry in the past fifty years came from outside the industry itself. Petersen, in The Road to 2015: Profiles of the Future,8 gives an overview of where we are and the type of change possibilities we may encounter: Enough transistors are produced each year to provide more than 10 million for every person. Each decade, the same amount of money buys 4000 times the computing power. Soon, the power of the processing units of 16 Cray YMP supercomputers, costing $320 million, will be manufacturable using about 1 billion transistors on a single chip, for less than $100. Holographic memory devices smaller than a cube of sugar may store more than 10 gigabytes. By the year 2000, the Japanese could introduce optical integrated circuits 1000 times faster than silicon chips. Silicon neuron chips already exist that behave like brain cells and operate in the analog mode, the way a brain does, using one tenmillionth the power of a comparable digital chip. 100 million U.S. Internet users are predicted by the end of the decade. Cellular telephone use grows 30% to 40% annually in the U.S. Some countries are going to wire every home with fiber optics. Japans target date is 2015. Artificial life (A-life), a technology from computational biology, is studying relatively simple algorithms that exhibit all of the characteristics of regular life. A simple form of A-life is already present computer viruses. Representations of human common sense will soon come with PCs, and programs will be available to interpret data from different cultural/philosophical/religious perspectives. Since patterns are so pervasive, pattern recognition systems such as holographic neural technology have enormous potential. Biotechnology is already making pharmaceuticals from plants, and genetic engineering allows concentration of ore and cleanup of toxic waste. Within the next few decades, genetic engineering will permit production of very high-purity bulk chemicals. Computational chemistry is changing capabilities of materials in fundamental ways. Soon it will be possible to create materials with pre-specified properties.
Virtual reality in the Information Age is projected to have the impact the telephone had in the Industrial Age. A number of scientific breakthroughs appear close, with significant developments in the next decade or two: Molecular nanotechnology, which works at the level of individual atoms, and molecular manufacturing will do for matter processing what the computer has (and will do) for information processing. It is projected to provide considerably stronger, more durable products with the cost of the actual production approaching the cost of the material used. Products from molecular manufacturing are anticipated by 2002. While the U.S. has lost interest, Japan and India are actively engaged in cold fusion research. Condensed charge technology (CCT) provides powerful clusters of electronic charge capable of micro-arc discharges into a system. Applications are anticipated within the next two years. Significant progress towards three-dimensional, full-color holographic projection is possible within the next two decades. Robotics should gain appreciably from synergistic combinations of several breakthroughs. Advances in microelectronics, when coupled with those in pattern recognition, will permit pocket-sized units for language translation of conversations by 2000. The day may soon come when molecules are manipulated by reaching out and grabbing them with virtual reality equipment.
Unintended, unknown, and delayed consequences may prove even more important in the long run.
Molecular manufacturing will do for matter processing what the computer does for information processing.
Information technology, biotechnology, and new materials are the three megatechnologies.9 Synergistic combinations of any and all emerging technologies multiply the possibilities. Based on past advances in technology, unintended, unknown, and delayed consequences may prove even more important in the long run than the direct and intended effects.10 1.2 Information Drivers It is unlikely that any form of transactions in history grew as fast as information flows in the global economy.11 It is estimated that the total information in the world is doubling every 18 months. Soon, anyone will be able to get any information to almost anyone else, whenever they want. Increasingly, information is being moved instead of people.12 A company can operate in many countries without having to build large infrastructures in any.13 All businesses must think cybercorp. They must be agile, virtual, fast learning, global corporations.14 Knowledge is becoming the determinant that financial capital used to be, and knowledge workers now carry the tools of production in their heads. Authority is being replaced by information in determining influence.15 Knowledge capital is very different from physical capital. Since it cannot be owned, capitalists are not inclined to invest in it.
Investments in human capital are too long-term for traditional capitalists and have to be made in a social context at odds with capitalisms emphasis on individualism. Within this context, capitalism badly needs to do things that go against its basic tenets.16
Knowledge workers carry the tools of production in their heads. Since knowledge cannot be owned, capitalists are not inclined to invest in it.
Knowledge workers value is gained through formal education. They know how to learn and will continue to learn throughout their productive lives. What is learned and how it is used determine competitive success. Since an individuals productive knowledge is increasingly specialized, knowledge workers will have to work in teams and through organizations17 to translate that knowledge into tangible results. The implications of this change are significant. The concept of a society of knowledge-based and knowledge-focused organizations is totally new and can be expected to generate unprecedented tensions.18 Knowledge has economic value only to the extent it fits the need at a given moment, not on the basis of its intrinsic content.19 Allocation of knowledge, rather than wealth, is the basis for any effective strategy for reducing joblessness.20 There is, however, significant potential economic, social, and political danger in investing considerable time and money in educating expanding numbers of people in fields of knowledge that are highly valued today, but may not have value in the future. How does a capitalistic system manage knowledge, the new competitive discriminator, when that knowledge belongs to the knowledge workers? Businesses such as law, accounting, and investment banking have dealt with this situation for some time. One immediate observation is that they are not generally run by absentee outside capitalistic owners, but by working partners. When such firms are publicly held, a large portion of employee income depends on performance-based bonuses, frequently available as deferred retirement benefits. In partnerships, the CEO is chosen by the partners. In all cases employees make substantial independent decisions. But this form of organization raises several questions: Since knowledge capital cannot be owned, who is responsible for essential long-term investments, not just in skills, but also in infrastructure and R&D? What is the process for forming the necessary knowledge teams 21 to leverage these assets? Knowledge-focused organizations require information systems that maximize knowledge, not just manage data. Todays information systems suffer both from the lack of standardization and from poor integration. Of the $80 billion of information technology systems projects in 1995, 31% were canceled, and only 16% of the rest were successful. That means only 11% of the total value of projects actually were up and running.22 This is an alarming observation in light of the critical importance of informational drivers. Even so, electronic commerce is expanding rapidly. Successful managers are those who, in a timely manner, turn data into useful information and communicate it quickly and effectively.23 This will be increasingly true in the future.
Knowledge has economic value only to the extent it fits the situational need at a given moment, not on the basis of its intrinsic content.
Some businesses have dealt with knowledge workers a long time. In all cases employees make substantial independent decisions.
1.3 Economic Drivers

New technologies interacting with new ideologies require new strategic approaches.
How much are things changing? New technologies interacting with new ideologies are generating new ground rules for the global economy, which in turn require new strategic approaches. These ground rules will be unstable for quite some time.24 The world economy comprises trade-investment associated with increasingly pervasive cross-border alliances and, more importantly, money and information flows.25 Money flows follow opportunity and are becoming more and more private. Transnational corporations do not identify with any country but are drawn to advantageous resource pools. Throughout the world, if the opportunity is attractive, the money will come. The strategies of MNCs [multinational corporations] are no longer shaped by reasons of state but by the desire...to tap attractive pools of resources.26 As a result, global money and information flows are nonnational, and no adequate theory exists to explain them, nor does policy exist to direct them. Trade increasingly follows investment and is not determined by the comparative advantage factors that worked for classical economics. While institutional trade and structural trade across national borders are legally viewed as foreign trade, this distinction is no longer relevant from the perspective of the businesses involved.27 Money has mutated from a tangible item to a volatile system producing an economy of speculation much larger than the traditional goods and services economy. A network of hundreds of thousands of computers has splintered the world into two economies: the real economy of goods and services and the much larger financial economy of speculation.28 World money flows, driven by currency speculation, significantly destabilize national economies, and monetary policy cannot be managed in this situation. For example, the foreign exchange money changing hands in a single day may be more than that needed for a year by international material trade and investment. Information flows may exceed money flows in terms of the revenue they generate and are most likely growing more rapidly than any other type of economic transactions in history.29 Governments, which used to play a big role in the flow of capital, may not be able to track and tax the transfer of knowledge across their borders.30 As the global economy gets larger, the component parts get smaller. John Naisbitt projects that by the beginning of the 21st Century there will be at least 300 countries and many more, rather than fewer, currencies.31 While large, diversified economies such as those of the U.S., Japan, and Germany will face lower costs of continuing to float their currencies against one another, smaller countries will find it more costly to do so.32 Traditional merchandise trade may now represent as little as a third of a developed countrys trade. This portion of the emerging world economy will practically be defined by factor price equalization, i.e., not paying more when you can get the equivalent of something cheaper
Transnational corporations do not identify with any country And global money and information flows are nonnational.
World money flows, driven by currency speculation, significantly destabilize national economies.
Alliances based on complementary knowledge are coming to dominate global economic integration.
elsewhere.33 The remainder is either trade of services (much of which is also subject to factor price equalization) or merchandise based on relationships, both of which are quite different from traditional merchandise. In the investment arena, alliances based on complementary knowledge rather than financial capital are coming to dominate global economic integration.34 Two-thirds of respondents to a survey of biotechnology companies, for example, stated that they were involved in some form of strategic alliance.35 Because of the interconnected nature of all global drivers, domestic prosperity can only be achieved by successful participation in the world economy.36 While global markets do not, of necessity, make financial bubbles more likely, if they do occur, their impact is potentially larger, raising the odds that national markets will crash together.37 1.4 Societal Drivers The 20th Century witnessed more social transformations of a more radical nature than any previous time period38 and the trend is continuing. No class in history has ever risen faster than the bluecollar worker. And no class in history has ever fallen faster.39 Technology has taken a heavy toll on middle managers, and now it appears that factor price equalization will hit the rest of white collar workers in developed countries. Indeed, the supply of available knowledge workers has increased substantially with the collapse of communism and through the education of emerging populations.40 Capitalism is efficient precisely because it harnesses the ruthless competitive forces of greed. It also generates creative destruction, as those unable to adapt to changing conditions are replaced at all levels by those who can.41 As a result of the emerging form of economic organization, we are shifting from a world of states to a world of societies.42 The possibility of class conflict is a real concern.43 This is nothing new. Establishment figures such as Bismarck, Churchill, and Roosevelt supported new forms of social welfare to protect capitalism by protecting the middle class.44 Employment creation will probably be one of the most important socioeconomic issues of the next 20-25 years for most countries.45 The Tofflers explain that, Any effective strategy for reducing joblessness in todays...economy must depend less on the allocation of wealth and more on the allocation of knowledge.46 The CATO Institute posits that multilateral aid agencies such as the World Bank and the International Monetary Fund have few if any cases of improved living standards to show for their efforts to transfer wealth. On the other hand, multinational corporations actually help spread prosperity.47 Today, more than 800 million people are unemployed or underemployed. This number will probably increase considerably by the year 2000. Reducing joblessness today depends on allocation of knowledge, not wealth, and may well come at someone elses expense. Some believe that technology will increasingly make all but a small elite of knowledge workers unnecessary, and that this will be the single most pressing issue of the coming century.48
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The possibility of class conflict is a real concern.
Employment creation will probably be one of the most important socioeconomic issues of the next 20-25 years.
Have nots are very aware of their differences from the haves.
More than 1 billion people annually earn less than $700 per family member. This means 20% of the people get by on 2% of the total world income. They generally have an inadequate diet and are exposed to unclean water. Another 3.3 billion people annually make $700 to $7500 for each family member. This 60% of the world population gets 33% of world income and has sufficient protein and caloric intake. The more than 1 billion people of the consumer class make over $7500 per year per family member. This 20% of the population gets 64% of world income.49 Today, as a product of mass communication, the have nots are very aware of the differences, which builds pressure for mass migration. It is predicted that by 2030:50 World population will grow by 50% to 100%. Developing countries will grow the most and increase from 78% of world population in 1990 to about 85%. Sub-Saharan Africa is projected to lead with a growth of about 300%, followed by South America and China by about 75% and 50%, respectively. By contrast, the growth projections for North America and Europe are 35% and 10% respectively. Average age will increase everywhere. These are not extreme forecasts. Larger projections are easily found and follow the same pattern. One case projects a U.S. population of 279 million by 2000 and 350 million by 2025 about a 35% increase 5 years sooner than that projected above. If this happens, the gap between rich and poor will grow.51 By 2000 there will be 28 megalopolises, each with more than 8 million people. Civilization appears to be in danger throughout the urban world. No longer in fear of enemies from outside, civilization now seems vulnerable to enemies from within. In the centers of the most modern cities, civilization has produced a savagery far worse than that which we once imputed to primitive tribes.52 In measuring economic welfare, there are calls to include human capital, government capital, and urbanization costs in new accounting approaches. Another approach is the U.N. System of National Accounts, where nonmarket values are in satellite accounts.53 Similar demands for new accounting systems are made by environmentalists (see Section 1.6). 1.5 Geopolitical Drivers The world economy has become too important for a country not to have a world-economic policy.54 Yet most countries do not. Governments will increasingly seek to fashion an economic system by which resources are organized for efficiency and growth. It is not a question of whether governments will intervene, but how they will do it in an attempt to improve national economic well-being.55
By 2030 world population will grow by 50% to 100%.
It is not a question of whether governments will intervene, but how.
Instead of thinking global and acting local, political leaders of the 1990s will have to think local, relating to their own people, while acting global to reach out to the flows of power and wealth.56 This will not be easy, considering the differing interests of transnational businesses and governments concerned about voter welfare. So far, governments have not tended to challenge transnational corporations since they can easily relocate.57 However, R&D done in a multinationals home country only to produce jobs elsewhere is likely to cause increasing resentment.58 Two fundamental changes are occurring: globalization and democratization.59 Democracy has replaced development as the buzzword for the 1990s, and it seems to be sweeping the globe.60 These changes set the stage for a fundamental political conflict in the opening decades of the new century...between the forces of globalization and the forces of local survival.61 Not surprisingly, there are proposals for radical political restructuring.62 For the foreseeable future, according to The Brookings Project on Integrating National Economies, there will be an interplay between two fundamental facts: The world will continue to be organized politically into nation-states and Increasing economic integration will continue to erode difference among national economies and undermine the autonomy of national governments.63 The end of the nation-state will follow the California-ization of taste (enabling development of a borderless global economy). The global media will form a deep rupture between generations (Nintendo Kids will have more in common with similar youngsters outside Japan than with other generations within Japan).64 The effectiveness of national governments is being undermined. Everywhere they face a crisis of redefinition. Some think a few hundred corporate giants are becoming the world empires of the 21st Century.65 While several countries, notably Japan and France, have been concerned about the impact of TNCs (transnational corporations), many governments avoid direct attempts to intervene in their activities because of the ease with which they can relocate.66 But there is no denying that individual consumers have become more globally oriented, reducing the need for the nation states traditional middleman role. More focused geographical units or region states is where the work gets done and real markets flourish.67 1.6 Environmental Drivers ...[H]uman beings and the natural world are on a collision course...Much of this damage is irreversible on a scale of centuries, or permanent...we are fast approaching many of the earths limits. Such sentiments are often attributed to environmental alarmists, but these are from a statement signed by 99 of the 196 living Nobel laureate scientists.68 Vice President Albert Gore explains that three factors have produced a radical change in the relationships between human civilization and the ecological system of the earth:
The fundamental political conflict will be between globalization and local survival.
Increasing economic integration will continue to erode the autonomy of national governments.
Human beings and the natural world are on a collision course.
The habit of denying responsibility for the long-term consequences of our actions Unprecedented and accelerating revolution in science and technology Rapid growth of human population.69 To adapt to this change it is necessary to develop a protocol for assessing sustainability, measure progress, and link sustainability levels to performance goals at national and subnational levels.70 Even though it is demonstrated that pollution and waste prevention pay off, neither waste nor the cost of pollutants are given values in the way most businesses keep score.71 Yet a cross-industry survey showed an average pay back of only slightly over 1.5 years for waste reductions and a 63% annual return on investment. A Dow Chemical division averaged a 204% return over 575 energy- and waste-reduction projects.72 In the view of some, the U.S. is confronted with a threat to its viability as a major industrial power in the coming century because it is failing to adapt to new environmental and technological imperatives. Competitors such as Japan and Germany incorporate environmental protection into their strategy for enhancing competitiveness and target the global environmental market. That market is currently about $200 billion/ year and could go to $600 billion/year by the turn of the century. The U.S. appears to be missing this opportunity.73 The U.S. uses twice as much energy per dollar of GNP as do Germany and Japan. The difference is mainly in using smarter technologies.74 It would require a restructuring of the power industry to develop a power system that is environmentally sustainable. The industry would need to provide a competitive market for wholesale electricity generation, an open-access transmission system, incentives for relying on diverse power sources, and development of service-oriented local distribution. Several nations have begun to do this75 as has California, which often leads the way nationally.76 International environmental standards such as ISO 14000 are also being developed.77 Pressure for energy conservation and efficiency is expected to build. Based on a world population of 8.1 billion by 2020, estimates for energy demand range from 17.2 (more than doubled from 1990) gigatons of oil equivalent (Gtoe) for high growth, to a minimum of 11.3 (up 30%) in an ecologically driven scenario.78 There could be dramatic shifts in the near future relating to environmental concerns. A projected significant decline in use of imported oil and coal in the coming decades would have a major impact on oil, auto, and utility industries.79 The fact is, conventional measures of economic progress fail to reflect the loss of ecological capital,80 leading to calls for full-cost accounting.81 Advocates want to make sustainable development a fundamental value in the way we govern and conduct our everyday lives.82 Some state flatly that the currently dominant accounting categories represent a radical form of cultural imperialism.83
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The U.S. appears to be missing an environmental opportunity.
Conventional measures of economic progress fail to reflect the loss of ecological capital.
Water and food security are also of emerging concern. Falling water tables have been noted in many areas; at the same time, growing populations increase demand for safe drinking water.84 Some say we have surpassed Earths carrying capacity, as indicated by how much we are damaging and depleting its natural capital. There are projections that if current trends in resource use continue...by 2010 per capita availability of rangeland will fall by 22%, irrigated land by 12%, cropland by 21%, forest land by 30%, and fish catch by 10%...we have entered an era in which global prosperity increasingly depends on using resources more efficiently, distributing them more equitably, and reducing consumption levels overall. Per capita grain output is declining worldwide and identified opportunities for expanding food production are small. While in the past, national security was defined by the Cold War; in the next 40 years, food and job security will dominate, often driving hungry and jobless people across national borders.85 In contrast to these dour forecasts, in what has been called an antigreen backlash, ten premier scholars challenge the myths of overpopulation, food, global warming, and pesticides, citing a large collection of positive benchmarks such as: U.S. pollution control expenditures up nearly fivefold since 1972 U.S. wetland gains since 1991 have been greater than the losses World cereal production is rising Consumption of energy per unit of GDP is declining. These scholars do, however, agree that fresh water is an urgent problem, and add fisheries and Third-World pollution to that category.86 1.7 Driver Interactions It was the absence of appropriate ideology that prevented the industrial revolution from occurring in China instead of Europe, even though China had the requisite technology far earlier.87 New ideas in science must be coupled with enabling ideology to produce paradigm shifts. The revolutionary idea of our day is quantum mechanics, the technological enabler is the microprocessor, and the enabling ideology will require that we regard the interdependence of all these changes as a challenge rather than as a threat.88 Since all the drivers interact simultaneously, the only way to envision their impact is a system-level approach. Societal values, the political arena, and the workforce are all being transformed into something totally new, bringing a new and different set of problems.89 Social beliefs coupled with actions by government shape the world economy,90 and these are the areas where innovation will be needed in the coming century. Changes in technology, however, happen much more quickly than changes in social values91 and political change is the slowest. [W]orldshrink, technobulge, and the need for building consensus based on shared values are considered three central trends.92
Lack of appropriate ideology prevented China from starting the industrial revolution.
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Knowledge and skills will be the sole basis of lasting strategic advantage.
Because of technological change, knowledge and skills are becoming the sole basis of lasting strategic advantage. Rather than making long-term investments for economic success, however, societal values favor shortterm consumption. When technology and ideology start moving apart [as they are], the only question is when will the big one (the earthquake that rocks the system) occur. According to Lester Thurow, capitalism [as practiced in the U.S.] will have to undergo a profound metamorphosis93 to adjust to the longer-term view. In addition, several of the items mentioned above, like significant population increases, mass migrations, food and water shortages, joblessness, social unrest, and awareness on the part of the have nots of the living standards of the haves, could create unstable business conditions in many parts of the world.
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2.0
Global Competitiveness
It is necessary to assess what changes have already occurred that have not yet had full impact.
o economic system other than capitalism has been made to work anywhere.94 But when and how does it work today? Neither managed trade nor traditional free trade seem able to produce growth any more.95 The new society based on knowledge will be the most competitive the world has ever seen. It is necessary to assess what changes in industry, market structure, basic values, and science and technology have already occurred that have not yet had full impact. They represent the potential business opportunities. But probability-based forecasting is inadequate with todays degree of uncertainty. Successful innovations will exploit the time lag between the change itself and its perception and acceptance. Capitalizing on such opportunities will require strategic investments in knowledge resources, and those investments must not be treated as expenses in bad years.96 Fundamental change is often initially detected among noncustomers. Some multinational corporations are exploring processes to address the acquisition and management of outside information. If experienced personnel are used, they can sometimes organize new information in a way that better challenges internal strategy.97 Capital intensity per unit manufactured has increased, making this an increasingly important factor in net profitability, and the function of obtaining business may be the most dynamic aspect of modern manufacturing organizations.98 Thus, a business must be market-driven as well as customer-driven. While in the past business was often thought of as buying cheap and selling dear, in the global economy a business adds value and creates wealth.99
Fundamental change is often initially detected among noncustomers.
Increased participation in the world economy is the key to domestic economic growth and prosperity.
The one unambiguous lesson of the last forty years is that increased participation in the world economy has become the key to domestic economic growth and prosperity. A World Bank study of eight Asian superstars determined that what they shared in common were two economic policies: Do not try to manage the short-term domestic economy. Put priority on performance in the world economy over performance of the domestic economy. West Germany and Sweden both experienced considerable growth pursuing similar policies and withered when they abandoned them due to internal political considerations.100 The case can be made that, contrary to popular belief, investment abroad creates net jobs at home. The employment generated by the institutional trade to get the new facility into production is...substantially larger for several years to come than the annual output and the annual employment of the new facility. Most of this institutional trade comes from the home country of the investor...so far, however, only the Japanese seem to understand this.101 By 1992, the 100 largest non-banking/non-financial transnational corporations (TNCs) held about $3.4 trillion in assets, including
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roughly $1.3 trillion in other countries. They employed approximately 12 million of about 73 million TNC employees globally. Thirty-eight of these TNCs were in the European Community (EC). The U.S. had 29. Japan had 16. And the remaining 17 were spread across 7 countries.102 Japan, China, Europe, and the U.S. are considered the four centers of power.103 Since all societies are striving for some form of market democracy, their relative performance will be heavily influenced by their differing cultural attributes.104 It is worth noting that it was not technology, but values, that prolonged the Dark Ages for hundreds of years.105 Against this backdrop, the Chairman of Sony sent an open letter to the G-7 leaders, proposing that we begin to seek the ways and means of lowering all economic barriers between North America, Europe, Japan, creating the nucleus of a new world economic order. This would include a harmonized world business system with agreed rules and procedures that transcend national boundaries.106 2.1 The United States America is where the future usually happens first.107 But, we are not good at converting basic R&D into viable commercial products.108 Other countries receive between one-fourth and one-third of the benefit from U.S. R&D investment. Also, the U.S. generally does not develop the mid-level skills that contribute so much to Germanys and Japans economic competitiveness.109 On the other hand, the U.S. has 75% of the worlds software market110 and an information network far superior to anywhere else.111 And, Drucker maintains, there is really no net U.S. trade deficit when the large services trade surplus is counted. Only merchandise trade shows a deficit, and he thinks a more expensive dollar vs. the yen could shrink that relatively quickly.112 The U.S. fell from having more than 50% of the world GDP in 1960 to less than 25% today, but the earlier overwhelmingly dominant position was largely a legacy of World War II. The EC is now the worlds largest market, with the U.S. in second place. Like Japan, the EC is closed to Third-World-manufactured goods. 113 The U.S., like the EC, faces great pressure to either import from manufacturing plants in neighboring countries or be swamped by massive immigration of generally unskilled workers.114 Third-World countries with populations in the billions want to become exporters, but with such pressure on its border, and with only 23% of the worlds GDP, the U.S. can no longer be the default market for every developing nation.115 With a few notable exceptions, U.S. manufacturing has not usually taken a long-term view. Strategic analysis generally pays too little attention to major factors like technological developments, political scenarios, and demographics. The basic approach has not changed for years and continues to emphasize high market share, high capacity utilization in terms of both facilities/equipment and labor, and of course maximum profitability. More recently, investment intensity (the level of fixed and working capital required to produce a dollar in sales)
Relative performance will be heavily influenced by differing cultural attributes.
The U.S. is not good at converting basic R&D into viable commercial products.
U.S. manufacturing has not taken a longterm view.
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and direct cost per sales unit figures have been appearing with more regularity as well.116 Annual U.S. productivity growth exceeded 2% in 15 of the 18 years from 1950 to 1968, but has been generally lower ever since. That 2% rate was exceeded in only 4 of the next 17 years, and total cumulative growth from 1986 to 1991 was only 3%. U.S. output per hour was initially surpassed by Japan in 1980. From 1980 to 1986, manufacturing profits declined 5% while wholesale and retail profits rose 150%. During the same period, U.S. high-tech exports increased by 29%, but high-tech imports went up roughly 250%. Today, foreign competition threatens 70% of U.S. manufactured goods. For several years, a third of our manufactured goods have been protected by some form of trade restriction. Yet, U.S. manufacturers have now begun directly transporting U.S.-developed technology overseas on a large scale.117 Only 2% of the materials used in manufacturing in the U.S. goes into the end product, and only 20% of all products are used more than once.118 Integrated product/process design problems persist. Todays surviving touch labor workers need skills not normally taught in our public schools, including statistical process control and working in teams. U.S. direct labor cost content is 10-15%. An American-built cars price covers roughly $360 in employee health care benefits compared to about $100 for a car built in Japan.119 But U.S. labor cost are only about 60% of Germanys because of their high social costs.120 Cost accounting actually seems to be approaching cost management, addressing the cost of quality and recognizing the need to manage overhead and capital expenditures. But, since formal reporting continues to satisfy Generally Accepted Accounting Principles (GAAP), the format has stayed relatively unchanged. Format changes that have taken place add complexity and can cause confusion.121 Mergers in the U.S. grew from 2400 in 1964 to over 4100 in 1990. Their size also grew. Mergers in emerging industries appear to be driven by marketing and capital considerations. This trend is expected to continue.122 The U.S. will become more diverse and more economically unequal. The population is also aging appreciably. It is estimated that the U.S. population will grow by 134 million between 1990 and 2050. More than 60% of the projected growth is anticipated to be due to immigrants and their descendants.123 The composition of the workforce continues to change, with 85% of new hires being female and/or minorities through the turn of the century.124 It has been said that the biggest problem facing Americans is that we as a people dont know how to come together to solve [our] problems.125
Most companies cannot afford to bring available workers up to competitive levels.
U.S. manufacturers have begun directly transporting U.S. technology overseas on a large scale.
Few, if any, companies are prepared to deal with the workplace impacts of these societal pressures. Many new workers lack the skills for competition in a global economy and annually almost 1 million drop out of high school in the U.S. The U.S. literacy rate could be down to 30% by the turn of the century. Most companies cannot afford to bring available workers up to competitive levels.126
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At the same time, the values of young Americans have changed markedly. They want more personal freedom over a wide range of workrelated areas, including more free time. But they show no sign of reducing spending, which contributes to rising consumer debt and declining personal savings rates, now the lowest of any major developed nation. Many workers at the entry level appear less willing to sacrifice or take on stress to build a career and increase earning power. They appear to want to get by on what they know, which is increasingly inadequate.127 This comes at a time when global economic survival depends on knowledge workers. There are many suggestions for solving the educational shortfall. One calls for restructuring the public education system for free market schooling. Another suggests grading students on creativity, dexterity, empathy, judgment, motivation, and personality, with the emphasis on creativity, not just academics.128 2.2 Asia In General Unlike Americans, Asians generally do not see the economy as a vehicle to raise living standards. Their perspective is political, and their focus is on building national strength. They accept the concept of concentrated power and adapt it to their long-term goals. The Asian approach, based on a clear industrial policy, is predicted to drive the global economy in the coming years.129 However, the oft-mentioned idea of a Pacific Century falsely presumes that the next one will be dominated by a particular region or power, as the second half of this century was. Power is diffusing more quickly than ever because of rapid growth and globalization. The swift movement of capital, technology, information, and skills across borders will make it difficult for any single economy to lead the others.130 2.3 Japan The Japan, Inc. approach is coming apart and Japanese companies are shifting to original research in a quest for breakthroughs. However, it should be remembered that this is the way many of the most successful companies, such as Sony, have always operated.131 Paradigm shift changes are occurring in Japan. This involves shifts from: Production to knowledge creation Spin-off diversification to a trickle-up process Dominant design standardization to interindustry competition Product pipeline progression to demand articulation Boundary breakthroughs in existing technologies to fusion of different types of technologies Technical evolution to institutional co-evolution of technology and social institutions.132 Roughly 94% of Japanese students complete high school vs. about 71% in the U.S., and their school year is 240 days vs. 180. Japanese high school graduates are educationally about 3 years ahead of average U.S. graduates.133
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Asians perspective is political, and their focus is on building national strength.
Japan is making significant changes from their past way of doing business.
The Japanese import all their industrial raw materials, most of their fuel and energy, and over one-third of what they eat. These commodities are all paid for in U.S. dollars. Japan has received a windfall subsidy from the fact that commodity prices inexplicably fell rather than rose in proportion to the rate at which the dollar went down against the yen. This phenomenon, contrary to economic theory, has lowered Japans domestic costs to only slightly over one-third of what they were a decade ago. About 40% of Japanese exports get paid for in U.S. dollars, which closely matches the dollars Japan needs to cover its commodity imports.134 2.4 China China may not develop nearly as quickly as is popularly believed.135 It does, however, have the worlds fastest-growing economy,136 and its very size will have an appreciable impact on the world economy. China can rapidly produce medium-skill workers. A Chinese worker who is more educated than the average American high school graduate is willing to work 11-hour days, 29 days a month for about $35. Additionally, China is thus far unimpeded by the cost of intellectual property rights. More than 90% of the software, CDs, etc. used in China is reportedly pirated. Also, if they can tap it, China would have a competitive advantage in the capabilities of the overseas Chinese.137 The Chinese have adapted South Koreas model of development but will have to deal with many problems, including political instability. China will have to acquire substantial telecommunications and information services. It will be unable to consider free trade, however, in view of its huge surplus rural population in need of jobs.138 Chinas economy appears set to become the worlds largest, by some measures as early as 2002. But doubts are growing about what China is, and the degree to which Beijings authority will give way to the centrifugal pull of Chinas increasingly dynamic periphery. China is an empire with fragile fringes. The south of China is culturally distinct and economically booming. That area has a strong case for greater independence. Chinas future economic growth may be problematic because of the shambles of Chinas fiscal and monetary policies. The budget deficit is growing and the increasingly worthless currency is fueling a dangerously inflated bubble economy.139 2.5 European Community
In Europe, ideology pushes economics.
An educated Chinese worker will work 11-hour days, 29 days a month for $35.
In Europe, ideology pushes economics, while in the rest of the world, economics pushes ideology. Traditionally, those who have the largest market set the rules for global trade by controlling entry conditions into their market. Today this would be the Common Market. But they are in the uncomfortable position of not being able to control entry conditions for Eastern European products. They will either have to take Eastern European products, sometimes at the expense of domestic industries, or be overwhelmed by economic immigrants from the area.140
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2.6 Former Soviet Union Communism produced educated people and trained scientific workers. The former Soviet Union had more scientists and engineers than any country except the U.S., and they are now available at bargain rates. The former USSR also has considerable natural resources. Its impact will be felt through both of these. For example, in 1987, the Soviet Union was the worlds largest oil producer, with a 19% share of the market.141 2.7 Developing Nations/Regions Lower wages for manufacturing are no longer an adequate lever for emerging countries to build a vibrant economy. Singapores experience indicates that success can be achieved in a relatively short time by leveraging advanced knowledge.142 Several other countries are capitalizing on low costs in high-skill knowledge areas. Both China and India have centers that design equipment for Motorola. Advanced computer chips for Texas Instruments are also designed in India, which additionally does an increasing amount of software development.143
The former Soviet Unions scientists and engineers are available at bargain rates.
China and India are capitalizing on low costs in high-skill knowledge areas.
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3.0
Actions To Identify & Evaluate Continuing Change
hile we cannot predict the future, companies can take actions to assure continuing competitiveness by:
Adopting and maintaining a global system-level framework, recognizing this is a continuing process, not a point solution.
Seeking out significant changes that have already taken place, most often outside the traditional executives field of vision/industry, and capitalizing on them before others do. Installing an aggressive process for innovation and providing significant metrics, benchmarks, and incentives. Addressing sets of reasonably possible, as opposed to highly probable, scenarios and planning for robustness across the set, including identifying and acting on areas it is possible to influence, e.g., national policy through local representatives and industry associations. Recognizing that demographic trends are among the most available, trackable, and significant. Adopting a change identification and evaluation process, an example of which appears in Figure 3.0-1. Action plan development should use an integrated people, business process, and technology approach as described in Volume II of the NGM Project report, Imperatives for Next-Generation Manufacturing.
Identify: Demographic Impacts Significant Changes in: - Industry & Market Structures - Basic Values - Science & Technology Related Trends in: - Economic Structures - Societal Structures that havent yet fully impacted
Identify what has already happened that will most affect: Business in General Manufacturing in Particular
Define Additional Strengths Needed for Potential Opportunities Define Strengths Needed for Potential Opportunities
Develop Action Plan Frameworks
Define Potential Opportunities
Continual Updates
Identify U.S. Manufacturers Strengths
Figure 3.0-1. Change Identification and Evaluation Process (Adapted from Peter Druckers Managing in a Time of Great Change)
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4.0
Conclusions & Recommendations
anufacturing enterprises should incorporate serious factfinding and analysis into their strategic planning process to determine the degree to which they accept that the world is undergoing changes as far-reaching as those that moved it from agriculture to industrialism and from feudalism to capitalism. Reassessment should be an ongoing part of all strategic planning updates. Strategic and operational planning and implementation should provide success metrics and incentives for development of processes to: Institutionalize, as part of the culture, an integrated system approach to the global changes summarized in this report. Continually identify significant events that occur outside of manufacturing and which have potential to have serious impact on a manufacturing enterprises competitive position. Innovate by exploiting the time lag between when significant changes happen and when they are broadly perceived or accepted. Continually identify and evaluate future-driven actions to incorporate into strategic and operational plans.
19
Appendix 1 Sources
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22. Flavin, Christopher, and Nicholas Lenssen. Power Surge: Guide to the Coming Energy Revolution. (The Worldwatch Environmental Alert Series). New York: W.W. Norton & Co., 1994. Abstracted in FSA 1996. Abstract #13608, p. 76. 23. Flavin, Christopher, and Nicholas Lenssen. Powering the Future: Blueprint for a Sustainable Electricity Industry. Worldwatch Paper 119. Washington, D.C.: Worldwatch Institute, June 1994. Abstracted in FSA 1996. Abstract #13609, p. 76. 24. Funtowicz, Silvio O., and Jerome R. Ravetz. Science for the Post-Normal Age, Futures, 25:7, Sept. 1993, 739-755, Abstracted in FSA 1995. Abstract #13297, p. 162. 25. Future Survey: A Monthly Abstract of Books, Articles, and Reports Concerning Forecasts, Trends, and Ideas About the Future. [Hereafter cited as FS.] 26. Giddens, Anthony. Beyond Left and Right: The Future of Radical Politics. Stanford, CA: Stanford University Press, 1994. Abstracted in FSA 1996. Abstract #13670, pp. 94-95. 27. Gills, Barry, Joel Rocamora, and Richard Wilson (eds.). Low Intensity Democracy: Political Power in the New World Order. Boulder, CO: Pluto Press, 1993. Abstracted in FSA 1995. Abstract #12826, p. 24. 28. Gore, Al. The Rapid Growth of the Human Population: Sustainable Economic Growth, Vital Speeches of the Day, 60:24, 1 October 1994, pp. 741-745. Abstracted in FSA 1996. Abstract #13506, p.47. 29. Hauchler, Ingomar, and Paul M. Kennedy (eds.). Global Trends: The World Almanac of Development and Peace. New York: Continuum, 1994. Abstracted in FSA 1996. Abstract #13348, p. 1. 30. Kendall, Henry (coordinator). World Scientists Warning to Humanity. Washington: Union of Concerned Scientists, Nov. 1992. Abstracted in EISF 1996. Abstract #005, p. 2. 31. Kidder, Rushworth M. Shared Values for a Troubled World: Conversations with Men and Women of Conscience. San Francisco: Jossey-Bass Publishers, 1994. Abstracted in FSA 1995. Abstract #12777, p. 10. 32. Kodama, Fukio. Emerging Patterns of Innovation: Sources of Japans Technological Edge. Boston, MA: Harvard Business School Press, 1995. Abstracted in FSA 1996 Abstract #13913, p. 165. 33. Kristof, Nicholas D. The Rise of China, Foreign Affairs, 72:5, Nov.-Dec. 1993, 59-74. Abstracted in FSA 1995. Abstract #12843, p. 30. 34. Kurtzman, Joel. The Death of Money: How the Electric Economy Has Destabilized the Worlds Markets and Created Financial Chaos. New York: Simon & Schuster, 1993. Abstracted in FSA 1995. Abstract #12810, pp. 20-21. 35. Lapp, Frances Moore, and Paul Martin Du Bois. The Quickening of America: Rebuilding Our Nation, Remaking Our Lives. San Francisco: Jossey-Bass, 1994. Abstracted in FSA 1995. Abstract #13052, p. 90. 36. Latouche, Serge. In the Wake of the Affluent Society: An Exploration of Post-Development. London and Atlantic Highlands, NJ: Zed Books, 1993. Abstracted in FSA 1995. Abstract #12827, pp. 24-25. 37. Leebaert, Derek (ed.). The Future of Software. Cambridge, MA: MIT Press, 1995. Abstracted in FSA 1996. Abstract #13883, pp. 157-158. 38. Lesh, Donald R., and Diane G. Lowrie. Sustainable Development Tool Kit. Washington, D.C.: Global Tomorrow Coalition, 1995. Abstracted in FSA 1996. Abstract #13512, p. 49. 39. Linstone, Harold A. Technological Slowdown or Societal Speedup - The Price of System Complexity? Technological Forecasting and Social Change, 51:2, Feb. 1996, 195-205. Abstracted in FS 18:7, July 1996, p. 3 Abstract #96304. 40. Lodge, George. Managing Globalization in the Age of Interdependence. San Diego, CA: Pfeiffer & Company, 1995. Abstracted in FSA 1996. Abstract #13418, p. 23. 41. Lutz, Wolfgang. The Future of World Population, Population Bulletin, 49:1, June 1994. Abstracted in FSA 1995. Abstract #12761, p. 5. 42. Marien, Michael (ed.). Environmental Issues and Sustainable Futures: A Critical Guide to Recent Books, Reports, and Periodicals. Bethesda, MD: World Future Society, 1996. [Hereafter cited as EISF 1996.]
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43. Marien, Michael with Lane Jennings (eds.). Future Survey Annual 1995: A Guide to the Recent Literature of Trends, Forecasts, and Policy Proposals. Bethesda, MD: World Future Society, 1995. Vol. 15, abstracts 1274913276. [Hereafter cited as FSA 1995.] 44. Marien, Michael with Lane Jennings (eds.). Future Survey Annual 1996: A Guide to the Recent Literature of Trends, Forecasts, and Policy Proposals. Bethesda, MD: World Future Society, 1996. Vol. 16, abstracts 1334913718. [Hereafter cited as FSA 1996.] 45. Martin, James. Cybercorp: The New Business Revolution. New York: AMACOM, 1996. Abstracted in FS 18:12, Dec. 1996, p. 11. Abstract #96-583. 46. Moore, Curtis, and Alan Miller. Green Gold: Japan, Germany, the United States, and the Race for Environmental Technology. Boston: Beacon Press, 1994. Abstracted in FSA 1996. Abstract #13566, p. 64. 47. Morita, Akio. Toward a New World Economic Order, The Atlantic Monthly, 271:6, June 1993, 88-98. Abstracted in FSA 1995. Abstract #12805, p. 19. 48. Murdock, Steve H. An America Challenged: Population Change and the Future of the United States. Boulder, CO: Westview Press, 1995. Abstracted in FSA 1996. Abstract #13635, pp. 84-85. 49. Naisbitt, John. Global Paradox: The Bigger the World Economy, the More Powerful Its Smallest Players. New York: William Morrow, 1994. Abstracted in FSA 1995. Abstract #12803, pp. 18-19. 50. Naisbitt, John. Megatrends: Ten New Directions Transforming Our Lives. New York: Warner, 1982, p. 6. 51. Ohmae, Kenichi. The End of the Nation State: The Rise of Regional Economies. New York: The Free Press, 1995. Abstracted in FSA 1996. Abstract #13414, p. 22. 52. Petersen, John L. The Road to 2015: Profiles of the Future. Corte Madera: Waite Group Press, 1994, pp. 20, 21, 2930, 32, 34-35, 38, 42-45, 47, 49-50, 55, 58-65 53. The Post Nationalist Map: A Cartography of Cultures and Economies (Special Issue) New Perspectives Quarterly, 12:1, Winter 1994-95. Abstracted in FSA 1996. Abstract #13355, p. 3. 54. Preiss, Kenneth, Steven L. Goldman, and Roger N. Nagel. Cooperate to Compete: Building Agile Business Relationships. New York: Van Nostrand Reinhold, 1996, p. 133. 55. The Report of the Future Environmental Directions for Alberta Task Force. Ensuring Prosperity: Implementing Sustainable Development. Edmonton, Alberta: Alberta Environmental Protection Information Center, 1995. Abstracted in FSA 1996. Abstract #13513, p. 49. 56. Rifkin, Jeremy. The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era. New York: Tarcher/Putnam, 1995. Abstracted in FSA 1996. Abstract #13724, pp. 109-110. 57. Romm, Joseph J. Lean and Clean Management: How to Boost Profits and Productivity by Reducing Pollution. New York: Kodansha International, 1994. Abstracted in FSA 1996. Abstract #13563, p. 63. 58. Romm, Joseph J., and Amory B. Lovins. Fueling a Competitive Economy, Foreign Affairs, 71:5, Winter 1992-93, pp. 46-62. Abstracted in FSA 1995. Abstract #12989, p. 71. 59. Sakamoto, Yoshikazu (ed.). Global Transformation: Challenges to the State System. Tokyo: United Nations University Press, 1994. Abstracted in FSA 1996. Abstract #13354, p. 3. 60. Segal, Gerald. Chinas Changing Shape, Foreign Affairs, 73:3, May-June 1994, 43-58. Abstracted in FSA 1995. Abstract #12844, p. 30. 61. Simai, Mihaly (ed.). Global Employment: An International Investigation into the Future of Work. Volume 1. London and Atlantic Highlands, NJ: Zed Books, 1995. Abstracted in FSA 1996. Abstract #13412, p. 21. 62. Thurow, Lester C. The Future of Capitalism: How Todays Economic Forces Shape Tomorrows World. New York: William Morrow, 1996, p. 7. 63. Toffler, Alvin, and Heidi Toffler. Creating a New Civilization: The Politics of the Third Wave. Atlanta: Turner Publishing, 1995. Abstracted in FSA 1996. Abstract #13645, p. 87. 64. Toffler, Alvin, and Heidi Toffler. Getting Set for the Coming Millennium, The Futurist, 29:2, March-April 1995, 10-15. Abstracted in FSA 1996. Abstract #13646, pp. 87-88.
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65. Trzyna, Thaddeus C. (ed.). Sustainable World: Defining and Measuring Sustainable Development. Sacramento: International Center for the Environment and Public Policy/California Institute of Public Affairs, 1995. Abstracted in FSA 1996. Abstract #13508, p. 48. 66. UNCTAD/DTCI. World Investment Report 1994: Transnational Corporations, Employment and the Workplace. New York: United Nations Publications, 1994. Abstracted in FSA, 1996. Abstract #13411, pp. 20-21. 67. Weatherford, Jack. Savages and Civilization: Who Will Survive? New York: Crown Publishers, 1994. Abstracted in FSA 1995. Abstract #12756, p. 4. 68. World Energy Council. Energy for Tomorrows World: The Realities, the Real Options, and the Agenda for Achievement. New York: St. Martins Press, 1993. Abstracted in FSA 1995. Abstract #12987, p. 71. Sources Reviewed for General Background 1. 2. 3. 4. 5. 6. 7. 8. 9. Cetron, Marvin. An American Renaissance in the Year 2000: 74 Trends That Will Affect Americas Future - and Yours. Bethesda, MD: World Future Society, 1994. Coates, Joseph F. The Highly Probable Future: 83 Assumptions about the Year 2000. Bethesda MD: World Future Society, 1994. Coates, Joseph F. The Highly Probable Future: 83 Assumptions about the Year 2025, The Futurist, July-Aug. 1994. Abstracted in FSA 1995. Abstract #13021, p. 81. Coates, Joseph F., Jennifer Jarratt, and John B. Mahaffie. Future Work. Bethesda, MD: World Future Society, 1991. Collins, James C., and Jerry I. Porras. Built to Last: Successful Habits of Visionary Companies. New York: HarperCollins, 1994. Cornish, Edward. The Cyber Future. Bethesda, MD: World Future Society, 1996. Cornish, Edward (ed.). Exploring Your Future: Living, Learning, and Working in the Information Age. Bethesda, MD: World Future Society, 1996. Cornish, Edward (ed.). The Futurist. 30:3-4, 1996. Didsbury, Howard F., Jr. (ed.). Future Vision: Ideas, Insights, and Strategies. Bethesda, MD: World Future Society, 1996.
10. Didsbury, Howard F., Jr. (ed.). The Years Ahead: Perils, Problems, and Promises. Bethesda, MD: World Future Society, 1993. 11. Goldman, Steven L., Roger N. Nagel, and Kenneth Preiss. Agile Competitors and Virtual Organizations: Strategies for Enriching the Customer. NY: Van Nostrand Reinhold, 1995. 12. Mahaffie, John B., Andy Hines, and Joseph Coates. 28 Propositions for the Year 2000, Business Day 1:145, 1995, p. 1. 13. Marien, Michael (ed.). World Futures and the United Nations: An Annotated Guide to 250 Recent Books and Reports. Bethesda, MD: World Future Society, 1995. 14. Naisbitt, John. Megatrends Asia: Eight Asian Megatrends That Are Reshaping Our World. New York: Simon & Schuster, 1996. 15. Outlook 96. Bethesda, MD: World Future Society, 1995. 16. Overholt, William H. The Rise of China: How Economic Reform Is Creating a New Superpower. New York: W.W. Norton & Co., 1993. 17. Toffler, Alvin. The Third Wave. New York: Bantam, 1980.
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Appendix 2 Footnotes
1 2 3 4
William L. Duncan, Manufacturing 2000. New York: American Management Association, 1994, p. 13. Duncan, p. 24. John L Petersen, The Road to 2015: Profiles of the Future. Corte Madera: Waite Group Press, 1994, p. 20 Lester C. Thurow, The Future of Capitalism: How Todays Economic Forces Shape Tomorrows World. New York: William Morrow, 1996, p. 7. Thurow, pp. 8, 326. Silvio O. Funtowicz and Jerome R. Ravetz, Science for the Post-Normal Age, Futures, 25:7, Sept. 1993, 739-755, Abstracted in Michael Marien, with Lane Jennings (eds.), Future Survey Annual 1995: A Guide to the Recent Literature of Trends, Forecasts, and Policy Proposals. Bethesda, MD: World Future Society, 1995. Vol. 15, abstracts 1274913276. [Hereafter cited as FSA 1995.] Abstract #13297, p. 162. Peter F. Drucker, Managing in a Time of Great Change. New York: Truman Talley Books/Dutton, 1995, pp. 40, 137. John L. Petersen, The Road to 2015: Profiles of the Future. Corte Madera: Waite Group Press, 1994, pp. 21, 29-30, 32, 34-35, 38, 42-45, 47, 49-50, 55, 58-65. Duncan, p. 61. The Art of Forecasting: A Brief Introduction to Thinking About the Future from the World Future Society, Bethesda, MD: World Future Society, 1993, p. 2. Peter F. Drucker, Trade Lessons from the World Economy, Foreign Affairs 73:1, Jan.-Feb. 1994, 99-108. Abstracted in FSA 1995. Abstract #12814, pp. 21-22. Petersen, pp. 4, 39. Kenichi Ohmae, The End of the Nation State: The Rise of Regional Economies. New York: The Free Press, 1995, abstracted in Michael Marien, with Lane Jennings (eds.), Future Survey Annual 1996: A Guide to the Recent Literature of Trends, Forecasts, and Policy Proposals. Bethesda, MD: World Future Society, 1996. Vol. 16, abstracts 1334913718. [Hereafter cited as FSA 1996.] Abstract #13414, p. 22. James Martin, Cybercorp: The New Business Revolution. New York: AMACOM, 1996, abstracted in Future Survey: A Monthly Abstract of Books, Articles, and Reports Concerning Forecasts, Trends, and Ideas about the Future [Hereafter cited as FS] 18:12, Dec. 1996, p. 11. Abstract #96-583. Drucker, Managing, pp. 13, 246, 3. Thurow, pp. 281, 16. Drucker, Managing, pp. 235-240. Drucker, Managing, p. 92. Drucker, Managing, p. 248. Alvin Toffler and Heidi Toffler, Creating a New Civilization: The Politics of the Third Wave. Atlanta: Turner Publishing, 1995. Abstracted in FSA 1996. Abstract #13645, p. 87. Thurow, pp. 17, 279, 309. Kenneth Preiss, Steven L. Goldman, and Roger N. Nagel, Cooperate to Compete: Building Agile Business Relationships. New York: Van Nostrand Reinhold, 1996, p. 133. Duncan, p. 39. Thurow, pp. 3, 138. Drucker, Managing, p. 144. Ohmae. Drucker, Managing, pp. 201, 149.
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Joel Kurtzman, The Death of Money: How the Electric Economy Has Destabilized the Worlds Markets and Created Financial Chaos. New York: Simon & Schuster, 1993. Abstracted in FSA 1995. Abstract #12810, pp. 20-21. Drucker, Managing, pp. 144-146. Petersen, p. 39. John Naisbitt, Global Paradox: The Bigger the World Economy, the More Powerful Its Smallest Players. New York: William Morrow, 1994. Abstracted in FSA 1995. Abstract #12803, pp. 18-19. Barry Eichengreen, International Monetary Arrangements for the 21st Century. Washington: The Brookings Institution, 1994. Abstracted in FSA 1996. Abstract #13419, p. 23. Thurow, p. 167. Drucker, Managing, pp. 150-153. Duncan, p. 23. Drucker, Managing, pp. 153-154. Thurow, p. 223. Drucker, Peter F. The Age of Social Transformation, The Atlantic Monthly, 274:5, Nov. 1994, 53-80. Abstracted in FSA 1996. Abstract #13819, p. 139. Drucker, Managing, p. 219. Thurow, p. 46. Thurow, pp. 281, 66. Ingomar Hauchler and Paul M. Kennedy (eds.), Global Trends: The World Almanac of Development and Peace. New York: Continuum, 1994. Abstracted in FSA 1996. Abstract #13348, p. 1. Drucker, Managing, p. 235. Thurow, p. 250. Mihaly Simai, (ed.), Global Employment: An International Investigation into the Future of Work. Volume 1. London and Atlantic Highlands, NJ: Zed Books, 1995. Abstracted in FSA 1996. Abstract #13412, p. 21. Toffler and Toffler, Creating. Doug Bandow and Ian Vasquez (eds.), Perpetuating Poverty: The World Bank, the IMF, and the Developing World. Washington: CATO Institute, 1994. Abstracted in FSA 1995. Abstract #12825, p. 24. Jeremy Rifkin, The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era. New York: Tarcher/Putnam, 1995. Abstracted in FSA 1996. Abstract #13724, pp. 109-110. Alan Thein Durning, How Much Is Enough? The Consumer Society and the Future of the Earth. New York: W.W. Norton & Co., 1992. Abstracted in Michael Marien (ed.), Environmental Issues and Sustainable Futures: A Critical Guide to Recent Books, Reports, and Periodicals. Bethesda, MD: World Future Society, 1996. [Hereafter cited as EISF 1996.] Abstract #240, p. 71. Wolfgang Lutz, The Future of World Population, Population Bulletin, 49:1, June 1994. Abstracted in FSA 1995. Abstract #12761, p. 5. Leon F. Bouvier and Lindsey Grant, How Many Americans? Population, Immigration and the Environment. San Francisco: Sierra Club Books, 1994. Abstracted in FSA 1995. Abstract #13025, p. 82. Jack Weatherford, Savages and Civilization: Who Will Survive? New York: Crown Publishers, 1994. Abstracted in FSA 1995. Abstract #12756, p. 4. Clifford W. Cobb and John B. Cobb, Jr., The Green National Product: A Proposed Index of Sustainable Economic Welfare. Lanham, MD: University Press of America, 1994. Abstracted in FSA 1996. Abstract #13557, p. 62. Drucker, Trade Lessons from the World Economy. John H. Dunning, The Globalization of Business: The Challenge of the 1990s. New York: Routledge, 1993. Abstracted in FSA 1995. Abstract # 12806, pp. 19-20.
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Martin Carnoy, et al., The New Global Economy in the Information Age: Reflections on Our Changing World. University Park, PA: Penn State University Press, 1993. Abstracted in FSA 1995. Abstract #12802, p. 18. David Bailey, George Harte, and Roger Sugden, Transnationals and Governments: Recent Policies in Japan, France, Germany, the United States, and Britain. London & NY: Routledge, 1994. Abstracted in FSA 1996. Abstract #13416, p. 22. Thurow, p. 135. Yoshikazu Sakamoto (ed.), Global Transformation: Challenges to the State System. Tokyo: United Nations University Press, 1994. Abstracted in FSA 1996. Abstract #13354, p. 3. Barry Gills, Joel Rocamora, and Richard Wilson (eds.), Low Intensity Democracy: Political Power in the New World Order. Boulder, CO: Pluto Press, 1993. Abstracted in FSA 1995. Abstract #12826, p. 24. Richard J. Barnet and John Cavanagh, Global Dreams: Imperial Corporations and the New World Order. New York: Simon & Schuster, 1994. Abstracted in FSA 1996. Abstract #13415, p. 22. Anthony Giddens, Beyond Left and Right: The Future of Radical Politics. Stanford, CA: Stanford University Press, 1994. Abstracted in FSA 1996. Abstract #13670, pp. 94-95. Eichengreen. The Post Nationalist Map: A Cartography of Cultures and Economies (Special Issue) New Perspectives Quarterly 12:1, Winter 1994-95. Abstracted in FSA 1996. Abstract #13355, p. 3. Richard J. Barnet and John Cavanagh, Global Dreams: Imperial Corporations and the New World Order. New York: Simon & Schuster, 1994. Abstracted in FS 17:5, May 1995, p. 11. Abstract #232. Bailey, Harte, and Sugden. Ohmae. Henry Kendall (coordinator), World Scientists Warning to Humanity. Washington: Union of Concerned Scientists, Nov. 1992. Abstracted in EISF 1996. Abstract #005, p. 2. Al Gore, The Rapid Growth of the Human Population: Sustainable Economic Growth, Vital Speeches of the Day, 60:24, 1 October 1994, pp. 741-745. Abstracted in FSA 1996. Abstract #13506, p.47. Thaddeus C. Trzyna (ed.), Sustainable World: Defining and Measuring Sustainable Development. Sacramento: International Center for the Environment and Public Policy/California Institute of Public Affairs, 1995. Abstracted in FSA 1996. Abstract #13508, p. 48. Petersen, p. 77. Joseph J. Romm, Lean and Clean Management: How to Boost Profits and Productivity by Reducing Pollution. New York: Kodansha International, 1994. Abstracted in FSA 1996. Abstract #13563, p. 63. Curtis Moore and Alan Miller, Green Gold: Japan, Germany, the United States, and the Race for Environmental Technology. Boston: Beacon Press, 1994. Abstracted in FSA 1996. Abstract #13566, p. 64. Joseph J. Romm and Amory B. Lovins, Fueling a Competitive Economy, Foreign Affairs 71:5, Winter 1992-93, pp. 46-62. Abstracted in FSA 1995. Abstract #12989, p. 71. Christopher Flavin and Nicholas Lenssen, Powering the Future: Blueprint for a Sustainable Electricity Industry. Worldwatch Paper 119. Washington: Worldwatch Institute, June 1994. Abstracted in FSA 1996. Abstract #13609, p. 76. John Naisbitt, Megatrends: Ten New Directions Transforming Our Lives. New York: Warner, 1982, p. 6. Robert E. Cattanach, et al., The Handbook of Environmentally Conscious Manufacturing: From Design & Production to Labeling & Recycling. Burr Ridge, IL: William Mitchell Publishing, 1995. Abstracted in FSA 1996. Abstract #13562, p. 63. World Energy Council, Energy for Tomorrows World: The Realities, the Real Options, and the Agenda for Achievement. New York: St. Martins Press, 1993. Abstracted in FSA 1995. Abstract #12987, p. 71. Christopher Flavin and Nicholas Lenssen, Power Surge: Guide to the Coming Energy Revolution. Worldwatch Environmental Alert Series. New York: W.W. Norton & Co., 1994. Abstracted in FSA 1996. Abstract #13608, p. 76. A-7
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Lester R. Brown, Nicholas Lenssen, and Hal Kane, Vital Signs 1995: The Trends That Are Shaping Our Future. New York: W.W. Norton & Co., 1995. Abstracted in FSA 1996. Abstract #13504, pp. 46-47. Donald R. Lesh and Diane G. Lowrie, Sustainable Development Tool Kit. Washington: Global Tomorrow Coalition, 1995. Abstracted in FSA 1996. Abstract #13512, p. 49. The Report of the Future Environmental Directions for Alberta Task Force, Ensuring Prosperity: Implementing Sustainable Development. Edmonton, Alberta: Alberta Environmental Protection Information Center, 1995. Abstracted in FSA 1996. Abstract #13513, p. 49. Serge Latouche, In the Wake of the Affluent Society: An Exploration of Post-Development. London and Atlantic Highlands, NJ: Zed Books, 1993. Abstracted in FSA 1995. Abstract #12827, pp. 24-25. Brown, Lenssen, and Kane. Lester R. Brown, et al., State of the World 1994: A Worldwatch Institute Report on Progress Toward a Sustainable Society. New York: W.W. Norton & Co., 1994. Abstracted in FSA 1995. Abstract #12891, p. 43. Ronald Bailey (ed.), The True State of the Planet. New York: The Free Press, 1994. Abstracted in FSA 1996. Abstract #13542, p. 57. Thurow, p. 15. Petersen, pp. 8-10. Drucker, Managing in a Time of Great Change, p. 213. Thurow, p. 116. Harold A. Linstone, Technological Slowdown or Societal Speedup - The Price of System Complexity? Technological Forecasting and Social Change, 51:2, Feb. 1996, 195-205. Abstracted in FS 18:7, July 1996, p. 3 Abstract #96-304. Rushworth M. Kidder, Shared Values for a Troubled World: Conversations with Men and Women of Conscience. San Francisco: Jossey-Bass Publishers, 1994. Abstracted in FSA 1995. Abstract #12777, p. 10. Thurow, p. 326. Thurow, p. 1. Drucker, Trade Lessons from the World Economy. Drucker, Managing, pp. 236, 39-40, 43-44. Drucker, Managing, pp. 33, 138-139. Duncan, pp. 17, 44. Drucker, Managing, pp. 34, 140. Drucker, Managing, pp. 153, 158-160. Drucker, Managing, pp. 160-161. UNCTAD/DTCI, World Investment Report 1994: Transnational Corporations, Employment and the Workplace. New York: United Nations Publications, 1994. Abstracted in FSA, 1996. Abstract #13411, pp. 20-21. George Lodge, Managing Globalization in the Age of Interdependence. San Diego, CA: Pfeiffer & Company, 1995. Abstracted in FSA 1996. Abstract #13418, p. 23. The Post-Nationalist Map. Thurow, p. 262. Akio Morita, Toward a New World Economic Order, The Atlantic Monthly, 271:6, June 1993, 88-98. Abstracted in FSA 1995. Abstract #12805, p. 19. Alvin Toffler and Heidi Toffler, Getting Set for the Coming Millennium, The Futurist, 29:2, March-April 1995, 1015. Abstracted in FSA 1996. Abstract #13646, pp. 87-88. Duncan, p. 16. Thurow, pp. 294, 288.
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Next-Generation Manufacturing: Executive Overview

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NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

Printed in the United States of America

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NGM Enterprise Attributes

Dilemmas (Barriers to Attributes)

NGM Imperatives Action Plan Recommendations

The NGM Approach: A Broad Foundation

NEXT-GENERATION MANUFACTURING PROJECT

Drivers: Understanding the New Competitive Environment

NEXT-GENERATION MANUFACTURING PROJECT

NGM Attributes: A Vision for the Next Generation

Dilemmas: The Challenge of Managing Change

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

Strategy Direction & Alignment

Integration Framework Business Processes Technology

The NGM Company

New Insights for Manufacturing

NEXT-GENERATION MANUFACTURING PROJECT

Action Plans: The Journey to the Next Generation

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

Path Forward: The Next Steps

NEXT-GENERATION MANUFACTURING PROJECT

Volume I Summary Report

NEXT-GENERATION MANUFACTURING PROJECT

Rusty Patterson CEO, Agility Forum

David Hardt Co-Director, Leaders for Manufacturing (LFM)

Richard Neal Program Manager, Technologies Enabling Agile Manufacturing (TEAM)

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NGM Enterprise Attributes

Dilemmas (Barriers to Attributes)

NGM Imperatives Action Plan Recommendations

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

Global Drivers NGM Attributes

NGM Imperatives Action Plan Recommendations

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NGM Imperatives Action Plan Recommendations

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

Individual Provides Labor Hire and Retrain Ad Hoc Knowledge Acquisition

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT

NEXT-GENERATION MANUFACTURING PROJECT